- The market sentiment is downbeat as riskier assets weaken against the US dollar safe-haven status.
- AUD/USD falls on higher US T-bond yields, showing investors seem convinced that rising inflation will force the Fed to act fast.
- AUD/USD: Will dip towards support at 0.7427 and 0.7338 – Commerzbank.
The AUD/USD slides for the first time on the week, down 0.65%, trading at 0.7467 during the New York session at the time of writing.
The pair retreated from the 200-day moving average at around 0.7545 due to an adverse market sentiment surrounding the financial markets, triggered by the Chinese real-estate giant Evergrande, which dented investors’ market appetite for riskier assets.
Furthermore, the US 10-year Treasury yield advances four basis points, sits at 1.674%, just short of 2021 high, provides additional support to the greenback. The market seems convinced that rising inflation will force the Fed to act faster than expected, despite how vocal have Fed policymakers have been lately.
In the meantime, the US Dollar Index, which tracks the greenback’s performance against six rivals, rises a decent 0.06%, currently, at 93.66, weighing on the AUD/USD.
US Initial Jobless Claims fell more than expected, showing an improvement in the labor market
On the macroeconomic front, the Australian economic docket was absent.
On the US front, the Initial Jobless Claims for the week ending on October 16 fell to 290,000, better than the 300,000 estimated by analysts, showing that the labor market is resilient, as it is starting to accelerate the pace moderately. Moreover, the 4-week moving average decreased by 122,000, to sit at 2,481,000 in the week ending on October 9.
AUD/USD Price Forecast: To dip towards support at 0.7427 and 0.7338 – Commerzbank
According to Karen Jones, Team Head FICC, an analyst at Commerzbank said: “AUD/USD’s rally has reached the 55-week ma at 0.7516, above here lies the 200-day ma 0.7565. We would expect to see some profit taking in this vicinity (…) Very near term, we would allow for a small retracement.”
Further added, “Dips should find interim support at 0.7427 the 4th August high and 0.7338 (20-day ma), and this guards the 29th September low at 0.7171.”
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