AUD/USD retreats towards 0.7200 on firmer USD before Fed showdown


  • AUD/USD trims gains during the first positive performance in five days.
  • Another bond default story from China, pre-Fed woes underpin DXY strength.
  • RBA members refrain from monetary policy hints, PBOC defends China money supply from Evergrande fears.
  • FOMC verdict, geopolitics eyed for fresh impulse, tapering is the key.

AUD/USD fades post PBOC gains while paring the intraday gains to 0.11%, declining to 0.7240 ahead of Wednesday’s European session.

Fresh fears emanating from China and cautious mood ahead of the Federal Open Market Committee (FOMC) monetary policy meeting announcement challenge the pair buyers. On the same line was the RBA policymakers’ refrain to signal monetary moves.

The People’s Bank of China (PBOC) safeguards Beijing’s money flow against Evergrande default with a heavy liquidity injection of around 110 billion while the struggled read-estate major announced readiness to pay the coupons on September 23 expiry. However, chatters over China’s other real-estate player, namely Guangzhou R&F, suspending the bond trading renew the US dollar’s safe-haven demand. Furthermore, the Bloomberg headlines indicating the EU-US push to curb China's risk and the British-American ties, also joined by Australia, to challenge Beijing to weigh on the risk appetite and benefit the US Dollar Index (DXY).

That said, the US Dollar Index (DXY) picks up bids to 93.258, up 0.08% intraday by the press time.

Earlier in the Reserve Bank of Australia (RBA) policymakers, namely Deputy Governor Guy Debelle and Assistant Governor (Financial System) Michelle Bullock, refrained from any direct hints to the future monetary policy moves and challenged the AUD/USD buyers.

It’s worth noting that the recent probe to the risk-on mood weighs on the stock futures and the US Treasury yields also remain firmer at the latest.

Moving on, Fed tapering concerns and geopolitical fears concerning the West versus Beijing story may restrict the AUD/USD moves.

Read: Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot

Technical analysis

Unless crossing a confluence of 20-day and 50-day simple moving average (DMA), around 0.7335, AUD/USD bears can keep attacking monthly horizontal support near 0.7220.

Additional important levels

Overview
Today last price 0.724
Today Daily Change 0.0008
Today Daily Change % 0.11%
Today daily open 0.7232
 
Trends
Daily SMA20 0.7333
Daily SMA50 0.7337
Daily SMA100 0.7497
Daily SMA200 0.7602
 
Levels
Previous Daily High 0.7284
Previous Daily Low 0.7221
Previous Weekly High 0.7377
Previous Weekly Low 0.7262
Previous Monthly High 0.7427
Previous Monthly Low 0.7106
Daily Fibonacci 38.2% 0.7245
Daily Fibonacci 61.8% 0.726
Daily Pivot Point S1 0.7207
Daily Pivot Point S2 0.7182
Daily Pivot Point S3 0.7144
Daily Pivot Point R1 0.727
Daily Pivot Point R2 0.7308
Daily Pivot Point R3 0.7333

 

 

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