AUD/USD recovers further from YTD low, retakes 0.6400 mark and beyond on softer USD


Share:
  • AUD/USD gains positive traction on Friday and snaps an eight-day losing streak to the YTD low.
  • Hope for more stimulus from China prompts intraday short-covering amid a mildly weaker USD.
  • The Fed's hawkish outlook and looming recession risks limit the USD losses and cap the major.

The AUD/USD pair builds on the overnight bounce from the 0.6365 area, or its lowest level since November 2022 and gains some positive traction during the Asian session on Friday. Spot prices climb further beyond the 0.6400 mark in the last hour and for now, seem to have snapped an eight-day losing streak, though any meaningful appreciating move still seems elusive.

Fears over China's debt-laden property sector intensified after Evergrande – the country's second-large realtor – and a related company – Tianji Holdings – filed for protection from creditors in a US bankruptcy court on Thursday. This adds to concerns about the worsening economic conditions in China and fuels speculations about additional stimulus measures, which, in turn, drives some flows towards the China-proxy Australian Dollar (AUD). The US Dollar (USD), on the other hand, is seen consolidating just below its highest level since July 12 touched on Thursday and turns out to be another factor lending some support to the AUD/USD pair'.

The USD downtick, meanwhile, could be solely attributed to a modest pullback in the US Treasury bond yields from a multi-year peak. It is worth recalling that the yield on the benchmark 10-year US government bond shot back closer to its highest level since 2008 touched in October 2022 in the wake of growing acceptance that the Federal Reserve (Fed) will keep interest rates higher for longer. The expectations were reaffirmed by the July 25-26 FOMC meeting minutes, which revealed that policymakers continued to prioritize the battle against inflation. This should act as a tailwind for the US bond yields and the USD, eventually capping the AUD/USD pair.

Traders might also refrain from placing aggressive bullish bets around the Aussie in the wake of rising bets for another on-hold rate decision by the Reserve Bank of Australia (RBA) in September, bolstered by the disappointing domestic jobs data on Thursday. In fact, the Australian Bureau of Statistics (ABS) reported that the economy lost a net 14,600 jobs and the Unemployment Rate unexpectedly rose to 3.7% in July. Hence, it will be prudent to wait for strong follow-through buying before confirming that the AUD/USD pair has formed a near-term bottom and positioning for any further recovery in the absence of any relevant economic data from the US.

Technical levels to watch

AUD/USD

Overview
Today last price 0.6415
Today Daily Change 0.0011
Today Daily Change % 0.17
Today daily open 0.6404
 
Trends
Daily SMA20 0.659
Daily SMA50 0.6682
Daily SMA100 0.6672
Daily SMA200 0.6736
 
Levels
Previous Daily High 0.645
Previous Daily Low 0.6364
Previous Weekly High 0.6617
Previous Weekly Low 0.6486
Previous Monthly High 0.6895
Previous Monthly Low 0.6599
Daily Fibonacci 38.2% 0.6397
Daily Fibonacci 61.8% 0.6418
Daily Pivot Point S1 0.6362
Daily Pivot Point S2 0.632
Daily Pivot Point S3 0.6276
Daily Pivot Point R1 0.6448
Daily Pivot Point R2 0.6492
Daily Pivot Point R3 0.6534

 

 

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD stabilizes above1.0800, looks to post weekly gains

EUR/USD stabilizes above1.0800, looks to post weekly gains

EUR/USD continues to trade in a tight channel above 1.0800 in the second half of the day on Friday, as the improving risk mood makes if difficult for the USD to gather strength. The pair remains on track to snap a five-week losing streak.

EUR/USD News

GBP/USD clings to modest daily gains above 1.2650

GBP/USD clings to modest daily gains above 1.2650

GBP/USD trades in positive territory above 1.2650 in the American session on Friday. The bullish opening in Wall Street doesn't allow the USD to gather strength and helps the pair stay on track to close higher for the fifth consecutive day.

GBP/USD News

Gold holds steady above $2,020 as US yields edge lower

Gold holds steady above $2,020 as US yields edge lower

Gold regained its traction and stabilized above $2,020 after falling below this level during the European trading hours. The benchmark 10-year US Treasury bond yield is down nearly 1% on the day below 4.3%, allowing XAU/USD to keep its footing heading into the weekend.

Gold News

Ethereum price risks decline as increasing exchange supply raises chances of profit taking

Ethereum price risks decline as increasing exchange supply raises chances of profit taking

Ethereum price crossed $3,000 several times this week but the altcoin failed to sustain above this key level, raising concerns regarding its price trend. ETH price faces the risk of decline as the supply of the altcoin on exchanges is on the rise. 

Read more

Up go stocks, down go bonds

Up go stocks, down go bonds

We knew that yesterday was going to be a good day – at least for the stock markets, given that Nvidia defied the expectations that it would - maybe – fail to deliver $20bn sales in the latest quarter. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures