- AUD/USD meets with a fresh supply and snaps a two-day winning streak to a multi-month top.
- A goodish USD recovery and a softer risk tone turn out to be key factors weighing on the Aussie.
- The technical setup favours bulls and supports prospects for the emergence of some dip-buying.
The AUD/USD pair comes under some selling pressure on Tuesday and moves further away from its highest level since late August, around the 0.6945 area touched the previous day. Spot prices drop to a fresh daily low, around the 0.6860 region during the early North American session and for now, seem to have snapped a two-day winning streak.
A combination of factors assists the US Dollar to stage a goodish rebound from a seven-month low set on Monday, which, in turn, is seen weighing on the AUD/USD pair. A goodish pickup in the US Treasury bond yields, amid some repositioning trade ahead of Fed Chair Jerome Powell's speech, acts as a tailwind for the buck. Apart from this, a generally weaker tone around the equity markets further benefits the greenback's relative safe-haven status and contributes to driving flows away from the risk-sensitive Aussie.
From a technical perspective, the overnight positive move validated the post-NFP breakout through the 0.6890-0.6900 supply zone and the very important 200-day SMA. Adding to this, positive oscillators on the daily chart support prospects for the emergence of some dip-buying around the AUD/USD pair. Hence, any subsequent pullback is more likely to find decent support near the 0.6840 region (200 DMA). That said, a convincing break below might prompt some technical selling and set the stage for deeper losses.
The AUD/USD pair could then accelerate the accelerate the fall towards the 0.6800 mark. The latter should act as a strong base for the major, which if broken decisively will negate the near-term positive outlook and shift the bias in favour of bearish traders. The subsequent fall has the potential to drag spot prices towards the next relevant support near the 0.6725-0.6720 area en route to the 0.6700 round figure.
On the flip side, the 0.6900-0.6910 area should now act as an immediate strong hurdle ahead of the overnight swing high, around the 0.6945 region. Some follow-through buying should allow the AUD/USD pair to aim back to reclaim the 0.7000 psychological mark. The positive momentum could get extended further towards an intermediate resistance near the 0.7045-0.7050 zone en route to the 0.7100 round-figure mark.
AUD/USD daily chart
Key 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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.