|

AUD/USD rebound eyes 0.6850 amid mixed sentiment ahead of Fed’s favorite inflation gauge

  • AUD/USD picks up bids to extend the previous day’s recovery from seven-week low.
  • Headlines from China, Japan seem to propel the latest price moves.
  • Geopolitical fears, hawkish Fed concerns keep bears hopeful ahead of US Core PCE Price Index for January.

AUD/USD braces for the key US data around 0.6825, extending the previous day’s rebound from a seven-week low during early Friday. In doing so, the Aussie pair seems to cheer the latest headlines from China and Japan as they tame the previous risk-off mood. However, fears surrounding Russia and the US-China ties join hawkish Federal Reserve (Fed) concerns to keep a tab on the bulls.

Comments from the Japanese government's nominee for the new central bank governor, Kazuo Ueda, seem to offer enough volatility to the yields. The reason could be linked to the incoming Bank of Japan (BoJ) Governor’s statements which initially defended the easy money policy before showing readiness for tightening in case inflation pressure accelerates.

On the same line, China’s push for a cease-fire in the Ukraine-Russia war, as well as the signing of a deal to supply combat drones, seem to flash mixed geopolitical signals.

On the same line, the US Senators’ push to halt Chinese carriers overflying Russia on US flights renews the market fears but the readiness to open dialogue with Beijing, as per the comments from Treasury Secretary Janet Yellen, challenges risk-aversion.

Furthermore, China’s Commerce Ministry urged the US to create good conditions for trade while also showing readiness to take more measures to revive and expand consumption.

Elsewhere, strong US data surrounding the Personal Consumption Expenditure (PCE) Price, weekly Initial Jobless Claims and Chicago Fed National Activity Index seem to keep the Fed hawks on the table.

Amid these plays, Wall Street closed on the positive side but the S&P 500 Futures recently failed to extend the recovery moves from the monthly low by retreating to 4,013, down 0.13% intraday at the latest. Further, the US 10-year Treasury bond yields seesaw around 3.875%, making it less active on the day, whereas the US two-year bond coupons stay inactive near 4.69% by the press time.

Moving on, risk catalysts may entertain the risk-barometer AUD/USD pair traders ahead of the Core PCE Price Index, expected to 4.3% YoY, compared 4.4% prior.

Technical analysis

AUD/USD extends bounce off the 200-DMA support, at the 0.6800 threshold by the press time. However, the rebound needs validation from an eight-day-old descending resistance line, around 0.6855 at the latest.

Additional important levels

Overview
Today last price0.6821
Today Daily Change0.0007
Today Daily Change %0.10%
Today daily open0.6814
 
Trends
Daily SMA200.6949
Daily SMA500.6892
Daily SMA1000.6722
Daily SMA2000.6803
 
Levels
Previous Daily High0.6842
Previous Daily Low0.6781
Previous Weekly High0.703
Previous Weekly Low0.6812
Previous Monthly High0.7143
Previous Monthly Low0.6688
Daily Fibonacci 38.2%0.6819
Daily Fibonacci 61.8%0.6805
Daily Pivot Point S10.6783
Daily Pivot Point S20.6752
Daily Pivot Point S30.6722
Daily Pivot Point R10.6843
Daily Pivot Point R20.6873
Daily Pivot Point R30.6904

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

AUD/USD holds above 0.6950 as bullish USD caps gains

AUD/USD edges lower during the Asian session on Tuesday, stalling a two-day recovery move from a two-month low, touched last week. An extended rout in the fixed income market keeps US bond yields elevated near multi-year highs. This, along with geopolitical uncertainties, helps the US Dollar retain its bullish tone despite receding October Fed hike bets. However, expectations for another RBA rate hike this month could act as a tailwind for the Aussie.

USD/JPY rises back above 158.00 despite hawkish BoJ outlook

USD/JPY rises back above 158.00 in the early European morning on Tuesday. The pair strengthens as the Japanese Yen fails to find any inspiration from hawkish BoJ expectations and looming intervention risks. Meanwhile, geopolitical uncertainty and elevated US bond yields keep the US Dollar near its YTD high despite receding October Fed hike bets. This, in turn, helps the pair stay supported.

Gold trades with modest gains; still below $4,200

Gold builds on Monday’s marginal bounce, although it struggles to reclaim the key $4,200 mark per troy ounce on Tuesday. The yellow metal’s advance comes on the back of the fresh downside momentum in the US Dollar in tandem with retreating US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP bulls battle to restart uptrend amid ETF outflows

Bitcoin upholds a robust bullish outlook, trading at $85,837 on Tuesday as sellers push to regain control over the trend. Altcoins, meanwhile, reflect Bitcoin’s ranging action, with Ethereum trading sideways above $2,700 and Ripple hovering around the pivotal $1.50 level.

Japanese Yen nears 158.00: Two analysts agree it's bullish, and disagree on how far the breakout goes

The JPY is drifting near 158.00 against the USD ahead of a busy week of Japanese data and a still-unclear BoJ timetable. The two most recent FXStreet analyses agree on the direction, but they disagree on the target and the mechanism.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.