AUD/USD recovers a major part of intraday losses, down little around 0.7610 region


  • A combination of factors prompted some fresh selling around AUD/USD on Monday.
  • Powell’s upbeat comments lifted the USD; a softer risk tone weighed on the aussie.
  • The emergence of dip-buying warrants some caution for aggressive bearish traders.

The AUD/USD pair remained depressed through the early European session, albeit has managed to rebound around 20 pips from daily swing lows. The pair was last seen trading around the 0.7610 region, down 0.10% for the day.

The pair witnessed some selling on the first day of a new trading week and was pressured by a combination of factors. The US dollar found some support from Fed Chair Jerome Powell's optimistic comments. This, along with a slight deterioration in the global risk sentiment, further drove some haven flows towards the greenback and weighed on the perceived riskier Australian dollar.

During an interview with 60 Minutes, Powell said that the US economy is set to make a turnaround and increased growth should provide more jobs. This reinforced the market expectations for a relatively faster US economic recovery from the pandemic, thanks to the impressive pace of coronavirus vaccinations and US President Joe Biden's over $2 trillion infrastructure spending plan.

Powell further added that the Fed wants inflation moderately above 2% for some time but does not want it to go materially above 2%. It is worth mentioning that the reflation trade has been fueling speculations about a potential uptick in US inflation and raised doubts that the Fed will retain ultra-low interest rates for a longer period, which also acted as a tailwind for the USD.

News that one of Iran's nuclear facilities was hit by a terrorist act dented investor’s appetite for perceived riskier assets and benefitted traditional safe-haven assets, including the USD. Despite the negative factors, the AUD/USD pair once again showed some resilience below the 0.7600 mark. This, in turn, warrants some caution before positioning for any further near-term depreciating move.

Even from a technical perspective, the AUD/USD pair has been oscillating in a broader trading range over the past three weeks or so. This further makes it prudent to wait for a sustained break in either direction in order to confirm the near-term trajectory. The market focus will remain glued to the release of the latest US consumer inflation figures, scheduled on Tuesday.

Technical levels to watch

AUD/USD

Overview
Today last price 0.7612
Today Daily Change -0.0011
Today Daily Change % -0.14
Today daily open 0.7623
 
Trends
Daily SMA20 0.766
Daily SMA50 0.7715
Daily SMA100 0.7654
Daily SMA200 0.7411
 
Levels
Previous Daily High 0.7662
Previous Daily Low 0.7588
Previous Weekly High 0.7678
Previous Weekly Low 0.7588
Previous Monthly High 0.785
Previous Monthly Low 0.7562
Daily Fibonacci 38.2% 0.7616
Daily Fibonacci 61.8% 0.7634
Daily Pivot Point S1 0.7586
Daily Pivot Point S2 0.755
Daily Pivot Point S3 0.7512
Daily Pivot Point R1 0.7661
Daily Pivot Point R2 0.7699
Daily Pivot Point R3 0.7735

 

 

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