• The risk-off impulse dragged the perceived riskier aussie to over a one-year low on Tuesday.
  • COVID-19 jitters took its toll on the global risk sentiment and triggered a selloff in equities.
  • Declining US bond yields weighed heavily on the USD and helped limit losses for the major.

The AUD/USD pair trimmed a part of its intraday losses to the lowest level since November 2020 and was last seen trading around the 0.7115 region, down 0.20% for the day.

Concerns about the potential economic fallout from the spread of a new vaccine-resistant variant – Omicron – triggered a fresh wave of the global risk-aversion trade. This was evident from a sharp fall in the equity markets, which, in turn, was seen as a key factor that drove flows away from the perceived riskier aussie. The AUD/USD pair dropped to sub-0.7100 levels, though the heavily offered tone surrounding the US dollar helped limit further losses, at least for the time being.

The latest developments surrounding the coronavirus saga now seemed to have dashed market expectations for an early policy tightening by the Fed. This, along with the global flight to safety, triggered a steep decline in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond dropped to a three-week low, back closer to the 1.45% threshold, and weighed heavily on the greenback. This, in turn, assisted the AUD/USD pair to recover around 25-30 pips.

That said, any meaningful upside still seems elusive amid a more dovish stance adopted by the Reserve Bank of Australia. Moreover, the AUD/USD pair's inability to attract buyers suggests that the near-term bearish trend witnessed over the past one month or so is still far from being over. Hence, attempted recovery moves might still be seen as a selling opportunity and run the risk of fizzling out rather quickly near the 0.7155-60 supply zone, or weekly high set in the previous day.

Market participants now look forward to the US economic docket, highlighting the release of Chicago PMI and the Conference Board's Consumer Confidence Index during the early North American session. The key focus, however, will be on Fed Chair Jerome Powell's testimony before the Senate Banking Committee. Powell's remarks will influence expectations about the Fed's next policy move and drive the USD demand, which, in turn, might produce short-term trading opportunities around the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price 0.7117
Today Daily Change -0.0014
Today Daily Change % -0.20
Today daily open 0.7131
 
Trends
Daily SMA20 0.7298
Daily SMA50 0.7339
Daily SMA100 0.734
Daily SMA200 0.7515
 
Levels
Previous Daily High 0.716
Previous Daily Low 0.7114
Previous Weekly High 0.7273
Previous Weekly Low 0.7111
Previous Monthly High 0.7557
Previous Monthly Low 0.7191
Daily Fibonacci 38.2% 0.7131
Daily Fibonacci 61.8% 0.7142
Daily Pivot Point S1 0.711
Daily Pivot Point S2 0.7088
Daily Pivot Point S3 0.7063
Daily Pivot Point R1 0.7156
Daily Pivot Point R2 0.7181
Daily Pivot Point R3 0.7203

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD retreats toward 1.0550 as dollar rebounds

EUR/USD retreats toward 1.0550 as dollar rebounds

EUR/USD has lost its traction in the American session and retreated to the 1.0550 area. In the absence of high-tier macroeconomic data releases, the dollar is staging a rebound with the US Dollar Index rising above 103.00 and forcing the pair to edge lower.

EUR/USD News

GBP/USD consolidates its weekly gains below 1.2500

GBP/USD consolidates its weekly gains below 1.2500

GBP/USD has extended its sideways grind below 1.2500 into the second half of the day on Friday with the dollar staying resilient against its rivals. Nevertheless, the pair remains on track to snap a four-week losing streak.

GBP/USD News

Gold loses traction, drops below $1,840

Gold loses traction, drops below $1,840

Gold came under modest bearish pressure in the American session on Friday and dropped below $1,840. The benchmark 10-year US Treasury bond yield stays quiet above 2.8%, helping XAU/USD limit its losses ahead of the weekend.

Gold News

Bitcoin price will bounce to $36,000, but what happens next will leave you shocked

Bitcoin price will bounce to $36,000, but what happens next will leave you shocked

A brief technical and on-chain analysis on Bitcoin price. Here, analysts evaluate where BTC could be heading next. Does the possibility for a cat bounce make sense?

Read more

PANW shows bullish reversal chart pattern after earnings beat

PANW shows bullish reversal chart pattern after earnings beat

PANW stock benefits from continued strong revenue growth. Palo Alto Networks now nearly services half of the Global 2000. PANW stock is showing a bullish reversal pattern on its daily chart.

Read more

Forex MAJORS

Cryptocurrencies

Signatures