AUD/USD recovers intraday losses, hovers near daily high around 0.7170 area

AUD/SUD attracted some dip-buying near the 0.7100 mark on Friday amid modest USD pullback.
Retreating US bond yields turned out to be a key factor that prompted some intraday USD selling.
The cautious market mood, hawkish Fed expectations should limit the USD losses and cap the pair.

Haresh Menghani FXStreet

The AUD/USD pair recovered its intraday losses and climbed to a fresh daily high, around the 0.7170 region during the early North American session.

The pair attracted fresh buying near the 0.7100 mark on Friday and for now, seems to have stalled the overnight sharp retracement slide from a three-week high, around the 0.7250 region. As investors digested Thursday's release of red-hot US consumer inflation figures, the US dollar witnessed some intraday selling amid modest pullback in the US Treasury bond yields. This, in turn, was seen as a key factor behind the AUD/USD pair's goodish intraday bounce of over 60 pips.

The upside, however, remains capped amid the prevalent cautious market mood, which acted as a headwind for the perceived riskier aussie. Apart from this, the prospects for a faster policy tightening by the Fed should help limit the downside for the US bond yields and the buck. This warrants caution before placing fresh bullish bets around the AUD/USD pair and positioning for the resumption of the recent strong recovery move from the lowest level since June 2020.

The red-hot US CPI report on Thursday reinforced market expectations that the Fed would adopt a more aggressive policy stance to combat high inflation. Adding to this, St. Louis Fed President James Bullard called for a 100 bps rate hike over the next three FOMC policy meetings. This boosted bets for a 50 bps rate hike in March, which, in turn, favours the USD bulls and supports prospects for the emergence of fresh selling around the AUD/USD pair at higher levels.

Nevertheless, the pair remains on track to post the second successive weekly gains. Traders now look forward to the release of the Prelim University of Michigan US Consumer Sentiment Index. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the AUD/USD pair. Apart from this, traders will take cues from the broader market risk sentiment to grab some short-term opportunities on the last day of the week.

Technical levels to watch

AUD/USD

Overview
Today last price	0.7165
Today Daily Change	0.0001
Today Daily Change %	0.01
Today daily open	0.7164

Trends
Daily SMA20	0.714
Daily SMA50	0.7167
Daily SMA100	0.7249
Daily SMA200	0.7368

Levels
Previous Daily High	0.725
Previous Daily Low	0.7147
Previous Weekly High	0.7168
Previous Weekly Low	0.6985
Previous Monthly High	0.7315
Previous Monthly Low	0.6966
Daily Fibonacci 38.2%	0.7187
Daily Fibonacci 61.8%	0.7211
Daily Pivot Point S1	0.7124
Daily Pivot Point S2	0.7084
Daily Pivot Point S3	0.7021
Daily Pivot Point R1	0.7227
Daily Pivot Point R2	0.729
Daily Pivot Point R3	0.7329

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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