- AUD/USD gained traction for the second straight day, albeit struggled to capitalize on the move.
- Elevated US bond yields helped revive the USD demand and acted as a headwind for the major.
- The formation of a bearish flag on the daily chart also warrants some caution for bullish traders.
The AUD/USD pair built on the previous day's rebound from an over one-month-old ascending channel support and gained traction for the second successive day on Thursday.
The upbeat Australian employment details, along with signs of stability in the equity markets turned out to be a key factor that benefitted the perceived riskier aussie. The AUD/USD pair shot to a one-week high, though bulls struggled to capitalize on the move beyond mid-0.7200s amid reviving US dollar demand.
Firming expectations for an eventual Fed lift-off in March remained supportive of elevated US Treasury bond yields and acted as a tailwind for the greenback. Nevertheless, the AUD/USD pair, so far, has held in the positive territory and was last seen trading around the 0.7240 region during the early North American session.
Looking at the technical picture, the recent recovery from the 2021 low – levels just below the key 0.7000 psychological mark – has been along an upward sloping channel. Given the sharp decline from the October 2021 swing high, the mentioned trend channel seems to constitute the formation of a bearish flag pattern.
That said, neutral technical indicators on the daily chart haven't been supportive of a firm near-term direction and warrant some caution before placing aggressive bets. Hence, it will be prudent to wait for a convincing break below the channel support, currently near the 0.7180 area, before positioning for a further decline.
The AUD/USD pair might then accelerate the downward towards testing the 0.7100 round-figure mark. The downward trajectory could further get extended towards the 0.7060-55 intermediate support before the pair eventually drops back to challenge the 0.7000 mark.
On the flip side, a sustained strength beyond the 0.7250 area has the potential to lift the AUD/USD pair towards the 200-day SMA, just ahead of the 0.7300 mark. Some follow-through buying should pave the way for a move towards challenging the trend-channel resistance, around the 0.7345 region, which should act as a pivotal point.
AUD/USD daily chart
-637782819161209987.png)
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.