AUD/USD: Slips below 0.7800 to refresh weekly bottom as risk-off mood backs US

AUD/USD posts the heaviest losses in over a week, on a slippery ground of late.
Escalating Middle East tension joins fears of Australia losing AAA rating to favor sellers.
Economic calendar remains light ahead of the key US CPI for April.

Anil Panchal FXStreet

AUD/USD becomes the Asia-Pacific region’s most negative major pair as it takes offers around 0.7785, down 0.68% intraday, during early Wednesday. In addition to the pre-US Consumer Price Index (CPI) cautious sentiment, escalating tussles between Israel and Palestine and market chatters of Australia losing its high rating also drag down the quote.

Despite the United Nations (UN) push for peace as Gaza strip, Israel Defense Forces tweets “the largest strike since 2014.” The geopolitical tussle has so far caused around 30 deaths and is continues to weigh on the lives of the Middle East residents.

Elsewhere, the Commonwealth Bank of Australia (CBA) mentioned in its recent report that the numbers currently show the (Aussie) rating should be AA+, not AAA.

It’s worth mentioning that the mixed updates concerning the coronavirus (COVID-19) vaccines and the traders’ fears that today’s US CPI will disappoint market bulls also magnify the risk-aversion wave.

Against this backdrop, S&P 500 Futures drop for the third consecutive day, down 0.70% on a day, whereas Australia’s ASX 200 marks 0.95% intraday loss by the press time.

Moving on, nothing matters more than the US CPI data as traders fear Fed’s tapering. As a result, any signals defying these calls could renew buying strength. That said, the US CPI is expected to rise from 2.6% to 3.6% YoY in April.

Read: US Consumer Price Index April Preview: The two base effects of inflation

Technical analysis

AUD/USD drops back below the previous resistance surrounding 0.7820, also breaks the 0.7800 threshold, which in turn directs sellers toward the 0.7660 minor support. However, a confluence of 200-SMA and an ascending support line from April 01 will challenge the bears around 0.7710 afterward. Meanwhile, an upside break of the 0.7820 support-turned-resistance should direct bulls to 0.7930 hurdle ahead of the yearly peak close to the 0.8000 threshold.

Additional important levels

Overview
Today last price	0.7799
Today Daily Change	-41 pips
Today Daily Change %	-0.52%
Today daily open	0.784

Trends
Daily SMA20	0.7762
Daily SMA50	0.7711
Daily SMA100	0.7718
Daily SMA200	0.7487

Levels
Previous Daily High	0.7857
Previous Daily Low	0.782
Previous Weekly High	0.7863
Previous Weekly Low	0.7674
Previous Monthly High	0.7819
Previous Monthly Low	0.7531
Daily Fibonacci 38.2%	0.7843
Daily Fibonacci 61.8%	0.7834
Daily Pivot Point S1	0.7821
Daily Pivot Point S2	0.7802
Daily Pivot Point S3	0.7784
Daily Pivot Point R1	0.7859
Daily Pivot Point R2	0.7876
Daily Pivot Point R3	0.7896

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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