- AUD/USD continues with its struggle to find acceptance above the 0.6700 mark on Friday.
- The risk-off mood revives demand for the safe-haven USD and caps the risk-sensitive Aussie.
- Expectations for a less hawkish Fed act as a headwind for the buck and lend some support.
The AUD/USD pair trims a part of its intraday gains to a nearly two-week high and retreats below the 0.6700 round-figure mark heading into the North American session on Friday.
A fresh leg down in the equity markets helps the safe-haven US Dollar to bounce off the daily low and acts as a headwind for the risk-sensitive Australian Dollar. Despite multi-billion-dollar lifelines for troubled banks in the US and Europe, investors remain worried about widespread contagion and the possibility of a full-blown global banking crisis. This, along with looming recession fears, takes its toll on the global risk sentiment and drives some haven flows towards the Greenback.
That said, declining US Treasury bond yields continue to weigh on the USD and remain supportive of the intraday bid tone surrounding the AUD/USD pair. Against the backdrop of the global flight to safety, expectations that the Fed will adopt a less hawkish stance amid the worsening economic conditions drag the US bond yields lower. In fact, the markets are now pricing in a greater chance of a smaller 25 bps rate hike at the upcoming FOMC policy meeting on March 21-22.
This comes on the back of last week's collapse of two mid-size US banks - Silicon Valley Bank and Signature Bank - and warrants some caution for the USD bulls. Traders, however, might prefer to move to the sidelines ahead of next week's key central bank event risk. In the meantime, the Reserve Bank of Australia's (RBA) recent dovish shift, signalling that it might be nearing the end of its rate-hiking cycle, might continue to cap the upside for the AUD/USD pair, at least for the time being.
Next on tap is the release of the Michigan US Consumer Sentiment Index. This, along with the US bond yields and the broader risk sentiment, might influence the USD price dynamics and provide some impetus to the AUD/USD pair. Nevertheless, spot prices manage to hold in the positive territory for the second successive day and remain on track to end the week on a positive note, reversing a major part of last week's losses to its lowest level since November 2022.
Technical levels to watch
|Today last price||0.6687|
|Today Daily Change||0.0031|
|Today Daily Change %||0.47|
|Today daily open||0.6656|
|Previous Daily High||0.6668|
|Previous Daily Low||0.661|
|Previous Weekly High||0.677|
|Previous Weekly Low||0.6564|
|Previous Monthly High||0.7158|
|Previous Monthly Low||0.6698|
|Daily Fibonacci 38.2%||0.6646|
|Daily Fibonacci 61.8%||0.6633|
|Daily Pivot Point S1||0.6621|
|Daily Pivot Point S2||0.6587|
|Daily Pivot Point S3||0.6563|
|Daily Pivot Point R1||0.6679|
|Daily Pivot Point R2||0.6703|
|Daily Pivot Point R3||0.6737|
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.