• AUD/USD remained under some selling pressure for the second straight day on Thursday.
  • Hawkish Fed expectations acted as a tailwind for the USD and dragged the major lower.
  • Recession fears weighed on investors’ sentiment and undermined the risk-sensitive aussie.

The AUD/USD pair witnessed some selling for the second successive day on Thursday and dropped to over a one-week low, around the 0.6870-0.6875 region during the early part of the European session.

The market sentiment remains fragile amid doubts that major central banks could hike interest rates to curb soaring inflation without affecting economic growth. Adding to this, the disappointing release of the flash Eurozone PMI prints further fueled worries about a possible recession and continued weighing on investors' sentiment. This, in turn, was seen as a key factor that acted as a headwind for the risk-sensitive aussie.

Apart from this, a goodish pickup in the US dollar demand exerted some downward pressure on the AUD/USD pair. The prevalent caution market mood offered some support to the safe-haven greenback, which drew additional support from hawkish Fed expectations. The markets seem convinced that the Fed would stick to its aggressive policy tightening path to combat stubbornly high inflation and deliver another 75 bps at its upcoming meeting in July.

Fed Chair Jerome Powell reaffirmed market bets and said on Wednesday that the ongoing rate increases will be appropriate. During his testimony before the Senate Banking Committee, Powell added that Fed is strongly committed to bringing inflation back down and the pace of future rate increases will continue to depend on incoming data. This, in turn, favours the USD bulls and supports prospects for additional near-term losses for the AUD/USD pair.

Even from a technical perspective, acceptance below the 0.6900 round-figure mark could be seen as a fresh trigger for bearish traders. Hence, a subsequent slide towards the monthly low, around mid-0.6800s, looks like a distinct possibility. The downward trajectory could further get extended towards the YTD low, around the 0.6830-0.6825 region touched in May. Next on tap will be the US macro data ahead of Powell's second day of testimony.

Thursday's US economic docket features the release of the usual Weekly Initial Jobless Claims, followed by the flash PMI prints for June later during the early North American session. Apart from this, Powell's remarks, the US bond yields and the broader market risk sentiment will influence the USD price dynamics, producing short-term opportunities around the AUD/USD pair.

Technical levels to watch


Today last price 0.6888
Today Daily Change -0.0039
Today Daily Change % -0.56
Today daily open 0.6927
Daily SMA20 0.7084
Daily SMA50 0.7109
Daily SMA100 0.7216
Daily SMA200 0.7236
Previous Daily High 0.6975
Previous Daily Low 0.6881
Previous Weekly High 0.707
Previous Weekly Low 0.685
Previous Monthly High 0.7267
Previous Monthly Low 0.6828
Daily Fibonacci 38.2% 0.6917
Daily Fibonacci 61.8% 0.6939
Daily Pivot Point S1 0.688
Daily Pivot Point S2 0.6833
Daily Pivot Point S3 0.6785
Daily Pivot Point R1 0.6974
Daily Pivot Point R2 0.7022
Daily Pivot Point R3 0.7069



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 rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 


GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.


Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!