AUD/USD stays defensive above 0.7500 as Australia bond yields ease from eight-year high

AUD/USD remains sidelined around five-month high, bulls running out of steam.
Aussie 3-year bond yields rose to the highest since 2014, US counterpart pokes January 2019 peak.
Sentiment dwindles over Russia-Ukraine woes, China’s covid fears as well.
Lack of major data/events can restrict market moves during the NFP week, China’s PMI will be important too.

Anil Panchal FXStreet

AUD/USD struggles for a clear direction around 0.7510-15 as bond bears jostle in Australia, as well as the US, during Monday’s Asian session.

Not only the Treasury bond yields but geopolitical fears and challenges emanating from China also test the AUD/USD prices. Alternatively, firmer commodities and the Reserve Bank of Australia’s (RBA) repeated rejection of the rate-hikes keep the pair buyers hopeful.

That said, Australia’s 3-year Treasury yields rally to the highest since December 2014, before recently easing to 2.30%. On the other hand, the US 3-year bond coupon pokes the highest levels since March 2019, firmer around 2.50% by the press time.

Elsewhere, fears that Russia and Ukraine will have another endless week of negotiations, as well as sustained invasion of Kyiv by Moscow, challenge the AUD/USD bulls. On the same line are the latest coronavirus updates from China suggesting lockdowns in Shanghai.

It should be noted that the hawkish Fedspeak also tests the AUD/USD buyers but the recently downbeat sentiment and housing data from the US helped the quote to remain firmer. Additionally, strong prices of iron ore, Australia’s key export, underpin the quote’s upside momentum.

That said, a mildly negative S&P 500 Futures and a light calendar restrict the AUD/USD pair’s immediate moves.

However, the US jobs report and official prints of China’s activity numbers for March will be important to watch and may challenge the AUD/USD bulls going forward.

Technical analysis

Overbought RSI conditions and sidelined moves near the late 2021 peak surrounding 0.7560 challenges the AUD/USD bulls. Alternatively, pullback moves may initially aim for early-March’s top near 0.7440.

Additional important levels

Overview
Today last price	0.7518
Today Daily Change	0.0003
Today Daily Change %	0.04%
Today daily open	0.7515

Trends
Daily SMA20	0.7347
Daily SMA50	0.7231
Daily SMA100	0.7219
Daily SMA200	0.73

Levels
Previous Daily High	0.7537
Previous Daily Low	0.7494
Previous Weekly High	0.7537
Previous Weekly Low	0.7372
Previous Monthly High	0.7286
Previous Monthly Low	0.7032
Daily Fibonacci 38.2%	0.7521
Daily Fibonacci 61.8%	0.7511
Daily Pivot Point S1	0.7494
Daily Pivot Point S2	0.7473
Daily Pivot Point S3	0.7451
Daily Pivot Point R1	0.7536
Daily Pivot Point R2	0.7558
Daily Pivot Point R3	0.7579

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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