AUD/USD: Risks further downside despite holding 0.7700 after Powell-led losses


  • AUD/USD remains pressured near weekly low, drops for third consecutive day.
  • Treasury yields soared even as Powell tried to ignore bond bears.
  • Fed Chair reiterated strong support to the central bank’s status-quo on monetary policy.
  • Italy blocks AstraZeneca’s Aussie vaccine supply, NFP in focus.

AUD/USD fails to keep the bounce off 0.7708, recently declining to 0.7720, while taking rounds to the weekly bottom during the initial Asian session on Friday. In doing so, the quote drops for the third day in a row as US Treasury yields stay firm around the fresh yearly top, marked after Fed Chair Jerome Powell’s latest speech.

Bonds aren’t the only problem…

AUD/USD dropped to the lowest since early Monday after Powell shrugged off a recent rally in Treasury yields but couldn’t convince markets. The Fed Chair said that they would be worried about “disorderly market conditions” while reiterating his “above 2.0% inflation” and “sustained employment” goals to trigger the change in the monetary policy.

Following his speech, US 10-year Treasury yields rallied above 1.50% while exerting downside pressure on the Wall Street benchmarks that closed Thursday below 1.0% each. The mood also favored the US dollar index (DXY) which jumped to the highest since December 01, 2020.

Not only the risk-off mood but Italy’s blockage of the AstraZeneca vaccine for Australia also weighs on the AUD/USD. Milan termed Aussie “non-vulnerable” under new EU controls to stop the recently cheered, by Australian PM Scott Morrison, vaccine arrival to Canberra.

It’s worth mentioning that the upbeat prints of Aussie Trade Balance and AiG Performance of Services Index couldn’t defy welcome US economics as markets are more concerned about February’s US employment report, up for publishing today at 13:30 GMT.

As Fed’s Powell followed ECB policymakers to turn down the fears of bond bears and the US stimulus is near to its passage, reflation risks are likely to keep the AUD/USD depressed during the pre-NFP trading lull.

Read: Nonfarm Payrolls Preview: Dollar booster? Three expectation downers pave way for upside surprise

Technical analysis

Despite breaking an ascending trend line from November 2020, AUD/USD bears need validation from 50-day EMA, near 0.7700, to retake the controls. Following that, February lows near 0.7560 should return to the chart.

Additional important levels

Overview
Today last price 0.7722
Today Daily Change -61 pips
Today Daily Change % -0.78%
Today daily open 0.7783
 
Trends
Daily SMA20 0.7781
Daily SMA50 0.7729
Daily SMA100 0.7519
Daily SMA200 0.7304
 
Levels
Previous Daily High 0.7838
Previous Daily Low 0.777
Previous Weekly High 0.8008
Previous Weekly Low 0.7692
Previous Monthly High 0.8008
Previous Monthly Low 0.7562
Daily Fibonacci 38.2% 0.7796
Daily Fibonacci 61.8% 0.7812
Daily Pivot Point S1 0.7757
Daily Pivot Point S2 0.773
Daily Pivot Point S3 0.7689
Daily Pivot Point R1 0.7824
Daily Pivot Point R2 0.7865
Daily Pivot Point R3 0.7892

 

 

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.

Feed news

Take advantage of market volatility with our daily Forex, Crypto and Indices Trade Ideas!

Become Premium!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD holds on to weekly gains, aims to 1.2100

EUR/USD pressures this week high at 1.2079 after the EU services sector moved back into expansion territory according to Markit, the first time since August.

EUR/USD News

GBP/USD extends decline towards the 1.3800 price zone

Upbeat UK data fell short of boosting the pound, hurt by Brexit jitters in Ireland. US macroeconomic figures making the difference in the dollar’s favor.

GBP/USD News

Bitcoin, Ethereum and XRP plummet, breaching critical support levels

Bitcoin price has dropped 12.7% since yesterday and shows no signs of stopping. Ethereum price follows the pioneer crypto’s lead and might retest $2,000 again. Unlike BTC or ETH, XRP price shows signs of recovery as long as it stays above a critical demand zone.

Read more

XAU/USD drops below $1,780 area as US T-bond yields rebound

Gold lost its traction after climbing toward $1,800 on Friday. 10-year US Treasury bond yield is up nearly 2%. Latest PMI data from US underlined strong price pressures.

Gold News

Bionano Genomics Inc runs into technical resistance, put options may work here

BNGO shares have continued to suffer post the retail meme crowd moving on. BNGO shares bounce from lows as DeMark buy signal flashes on Monday. BNGO shares trend up to resistance at 100 day moving average.

Read more

Forex MAJORS

Cryptocurrencies

Signatures