AUD/USD refreshes session highs on broad-based US dollar weakness

Broad-based US dollar weakness is powering gains in AUD/USD.
Fed's unlimited easing is aimed at keeping credit markets from freezing.
The RBA is also injecting liquidity to stabilize markets.

Omkar Godbole FXStreet Contributor

The upside in the Aussie dollar is gathering pace and pushing the AUD/USD pair higher. The pair is currently trading at session highs near 0.6940, representing a 2% gain on the day.

Dollar offered on Fed's unlimited QE

Asian desks are offering the greenback, possibly in response to the Federal Reserve's commitment to buy treasuries and mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions.

The dollar index, which tracks the value of the greenback against majors, is currently trading at 101.64, representing a 0.5% drop on the day.

RBA pumps liquidity

The Aussie dollar seems to be benefitting from the Reserve Bank of Australia's (RBA) latest efforts to ease stress in the financial markets. The central bank, on Tuesday, injected A$6.9 billion into the financial system and announced it would buy A$4 billion in government bonds, having made purchases worth A$4 billion in local government bonds on Monday.

AUD/USD could continue to trade on the offensive as the Fed's unlimited easing is likely to bring stability in credit markets, leading to a drop in the dollar funding costs. The US inflation expectations are also on the rise and pushing gold, one of Australia's top exports, higher.

Technical levels

AUD/USD

Overview
Today last price	0.5941
Today Daily Change	0.0102
Today Daily Change %	1.75
Today daily open	0.5839

Trends
Daily SMA20	0.6326
Daily SMA50	0.6582
Daily SMA100	0.6725
Daily SMA200	0.6788

Levels
Previous Daily High	0.5846
Previous Daily Low	0.57
Previous Weekly High	0.6307
Previous Weekly Low	0.5509
Previous Monthly High	0.6775
Previous Monthly Low	0.6434
Daily Fibonacci 38.2%	0.579
Daily Fibonacci 61.8%	0.5756
Daily Pivot Point S1	0.5744
Daily Pivot Point S2	0.565
Daily Pivot Point S3	0.5599
Daily Pivot Point R1	0.589
Daily Pivot Point R2	0.5941
Daily Pivot Point R3	0.6036

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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