AUD/USD struggles for direction, stuck in a range around 0.7700 mark

AUD/USD was seen oscillating in a range through the early European session on Monday.
The prevalent risk-on environment extended some support to the perceived riskier aussie.
A modest USD strength held bulls from placing fresh bets and capped any meaningful gains.

Haresh Menghani FXStreet

The AUD/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses, around the 0.7700 mark through the early European session.

A combination of diverging forces failed to provide any meaningful impetus to the AUD/USD pair and led to a subdued/range-bound price action on the first day of a new trading week. This comes on the back of the previous session's dramatic turnaround from two-and-half-week tops and favours bearish traders.

The underlying bullish sentiment in the financial markets – as depicted by an extended rally in the global financial markets – acted as a tailwind for the perceived riskier aussie. That said, a modest US dollar strength largely offset the supporting factor and capped the upside for the AUD/USD pair.

The USD consolidated Friday's strong move up to one-week tops amid expectations that the Fed might begin the discussion on tapering its asset purchases in the wake of rising inflationary pressures. It is worth recalling that the pace of inflation in the US climbed to a 13-year high in May.

This, along with signs of stability in the US Treasury bond yields, forced investors to lighten their bearish USD bets ahead of the FOMC policy meeting this week. Nevertheless, the fundamental backdrop might hold traders from placing aggressive bullish bets around the AUD/USD pair, at least for now.

There isn't any major market-moving economic data due for release from the US on Monday. Hence, the US bond yields will continue to play a key role in influencing the USD price dynamics. Apart from this, the broader market risk sentiment might further provide some impetus to the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price	0.7705
Today Daily Change	-0.0003
Today Daily Change %	-0.04
Today daily open	0.7708

Trends
Daily SMA20	0.7741
Daily SMA50	0.7735
Daily SMA100	0.7727
Daily SMA200	0.7546

Levels
Previous Daily High	0.7776
Previous Daily Low	0.7687
Previous Weekly High	0.7794
Previous Weekly Low	0.7687
Previous Monthly High	0.7892
Previous Monthly Low	0.7674
Daily Fibonacci 38.2%	0.7721
Daily Fibonacci 61.8%	0.7742
Daily Pivot Point S1	0.7671
Daily Pivot Point S2	0.7635
Daily Pivot Point S3	0.7582
Daily Pivot Point R1	0.776
Daily Pivot Point R2	0.7813
Daily Pivot Point R3	0.7849

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold traders seem noncommittal below $4,350; eyes Fed rate decision

Gold clings to modest intraday gains through the first half of the European session, albeit it lacks follow-through buying and remains below $4,350. The US Dollar eases from a two-week high amid some profit-taking, offering support to the commodity. Traders, however, seem hesitant to place aggressive directional bets and opt to wait on the sidelines heading into the key central bank event risk.

Cardano's bearish breakout warns of a 15% downside risk

Cardano (ADA) hovers around $0.1900 at press time on Wednesday after a 6% decline the previous day, breaking below a crucial support level. Declining on-chain activity across the Cardano ecosystem, with reduced transaction count and Real Economic Value (REV), suggests waning user demand.

Fed decision in focus

Starting with the most important, the Fed decision. Heading into the event, data showed a rather punchy US August jobs report, which, you will likely recall, triggered a hawkish Fed rate repricing in rates markets. However, the recent US August CPI print mattered more.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.