AUD/USD remains heavily offered below 0.6900 mark amid stronger USD, risk-off mood

  • AUD/USD meets with a fresh supply on Tuesday and reverses a major part of the overnight gains.
  • Hawkish Fed expectations, geoploitics and recession fears boost the USD and weigh on the risk-sensitive Aussie.
  • Hawkish-sounding RBA minutes fail to impress bulls.

The AUD/USD pair comes under some renewed selling pressure on Tuesday and reverses a major part of the previous day's positive move. The pair remains depressed below the 0.6900 mark through the first half of the European session. 

The negative price action falls in line with the dominant short-term downtrend, evidenced in the albeit volatile declining peaks and troughs since the February 1 highs, which suggests the wind is behind bears, and more downside is, on balance, more likely than upside. 

A combination of factors weighs on the AUD/USD pair: the US Dollar is being pushed higher by the prospects for further policy tightening by the Federal Reserve which is triggering a fresh leg up in the US Treasury bond yields and continuing to underpin the Greenback.

Geopolitical risks eminating from the Russia-Ukraine conflict and US-China political manouveuring as well as softer equities further benefits the safe-haven buck and drives flows away from the risk-sensitive Aussie.

Market sentiment remains fragile amid growing worries about economic headwinds stemming from rapidly rising borrowing costs which are also tempering investors' appetite for riskier assets of which the Aussie is one. 

Benefiting the buck is the fact that markets now seem convinced that the US central bank will stick to its hawkish stance and have been pricing in at least a 25 bps lift-off at the next two FOMC meetings in March and May.

This was reaffirmed by the US CPI and PPI data last week, which showed that inflation isn't coming down quite as fast as hoped. Furthermore, a slew of FOMC members stressed the need to keep lifting rates gradually to tame inflation.

Perhaps Fed hawkishness is overshadowing a more hawkish tilt from the recently released Reserve Bank of Australia (RBA) meeting minutes, as these failed to tempt bulls or lend any support to the AUD/USD pair.

In fact, the RBA minutes showed that the Australian central bank had considered raising interest rates by 50 bps during its February meeting, though eventually settled on a 25 bps hike.

The board of the Reserve Bank of Australia also agreed that more interest rate hikes are needed over the coming months to bring down inflation.

Yet this has had little impact on the AUD/USD pair which is unable to attract any buyers and suggests that the recent pullback from a multi-month top is far from being over.

Market participants now look to the US economic docket, featuring the release of flash PMI prints and Existing Home Sales data later on Tuesday. This, along with the US bond yields and the broader risk sentiment, could influence the USD price dynamics and provide some impetus to the AUD/USD pair.

The focus, however, will remain glued to the latest FOMC meeting minutes, which will play a key role in determining the near-term trajectory.

Technical levels to watch


Today last price 0.6875
Today Daily Change -0.0038
Today Daily Change % -0.55
Today daily open 0.6913
Daily SMA20 0.6989
Daily SMA50 0.6891
Daily SMA100 0.6711
Daily SMA200 0.6805
Previous Daily High 0.6921
Previous Daily Low 0.6862
Previous Weekly High 0.703
Previous Weekly Low 0.6812
Previous Monthly High 0.7143
Previous Monthly Low 0.6688
Daily Fibonacci 38.2% 0.6898
Daily Fibonacci 61.8% 0.6885
Daily Pivot Point S1 0.6877
Daily Pivot Point S2 0.6841
Daily Pivot Point S3 0.6819
Daily Pivot Point R1 0.6935
Daily Pivot Point R2 0.6957
Daily Pivot Point R3 0.6993



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.

Recommended content

Recommended content

Editors’ Picks

EUR/USD clings to daily gains above 1.0650

EUR/USD clings to daily gains above 1.0650

EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.


GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.


Gold holds steady at around $2,380 following earlier spike

Gold holds steady at around $2,380 following earlier spike

Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.

Gold News

Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium

Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in

Bitcoin price shows no signs of directional bias while it holds above  $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research. 

Read more

Week ahead – US GDP and BoJ decision on top of next week’s agenda

Week ahead – US GDP and BoJ decision on top of next week’s agenda

US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.

Read more