- AUDUSD staged a goodish bounce from a two-year low and snapped a two-day losing streak.
- Recession fears, Fed rate hike bets should underpin the USD and cap the risk-sensitive aussie.
- A three-week-old descending channel also points to a well-established short-term downtrend.
The AUDUSD pair once again showed resilience near the 0.6765-0.6760 area and staged a goodish bounce from over a two-year low set earlier this week. Spot prices extended the steady intraday ascent through the early part of the European session and climbed to the 0.6830-0.6835 area, reversing weekly losses.
Upbeat Australian trade balance data, along with recovery in iron ore prices, offered some support to the resources-linked aussie. Adding to this, a slight improvement in the risk sentiment prompted some profit-taking around the safe-haven US dollar and benefitted the risk-sensitive Australian dollar.
That said, growing fears about a possible global recession should keep a lid on any optimistic move in the markets. Apart from this, the prospects for more aggressive Fed rate hikes should act as a tailwind for the greenback and further contribute to capping the AUDUSD pair, at least for the time being.
From a technical perspective, the recent downfall since mid-June along a downward sloping trend channel points to a well-established short-term bearish trend. Hence, any subsequent move up is more likely to meet with a fresh supply near the top end of the said channel, currently around the 0.6865 area.
This is closely followed by the 0.6900 mark, which coincides with the 100-period SMA on the 4-hour chart. Some follow-through buying would suggest that the AUDUSD pair has formed a bottom and will trigger an aggressive short-covering move, which should lift spot prices towards the 0.6955-0.6960 supply zone.
On the flip side, the 0.6800 round figure now seems to protect the immediate downside ahead of the 0.6765-0.6760 area. Failure to defend the said support levels would make the AUDUSD pair vulnerable to slide further, towards challenging the ascending channel support, currently around the 0.6715-0.6710 area.
A convincing breakthrough the latter, leading to a subsequent fall below the 0.6700 mark would be seen as a fresh trigger for bearish traders and pave the way for additional losses. The AUDUSD pair might then accelerate the fall towards the next relevant support near the 0.6655-0.6650 region.
AUD/USD 4-hour chart
Key levels to watch
|Today last price||0.6827|
|Today Daily Change||0.0048|
|Today Daily Change %||0.71|
|Today daily open||0.6779|
|Previous Daily High||0.6827|
|Previous Daily Low||0.6761|
|Previous Weekly High||0.6965|
|Previous Weekly Low||0.6764|
|Previous Monthly High||0.7283|
|Previous Monthly Low||0.685|
|Daily Fibonacci 38.2%||0.6786|
|Daily Fibonacci 61.8%||0.6802|
|Daily Pivot Point S1||0.6751|
|Daily Pivot Point S2||0.6723|
|Daily Pivot Point S3||0.6685|
|Daily Pivot Point R1||0.6817|
|Daily Pivot Point R2||0.6855|
|Daily Pivot Point R3||0.6883|
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.