AUD/USD struggles for direction, stuck in a range around mid-0.7300s


  • AUD/USD lacked any firm directional bias and remained confined in a range on Wednesday.
  • A combination of factors extended some support to the USD and capped gains for the major.
  • Bulls shrugged off slightly stronger Australian CPI as the focus remains on FOMC decision.

The AUD/USD pair extended its sideways consolidative price action and remained confined in a narrow trading band, around mid-0.7300s heading into the European session.

The pair, so far, has been struggling to register any meaningful recovery and oscillating in a range over the past one week or so. Given the recent fall to the lowest level since November 2020, this might still be categorized as a bearish consolidation phase as investors await a fresh catalyst before placing any directional bets.

Hence, the key focus will remain on the outcome of a two-day FOMC monetary policy meeting, scheduled to be announced later during the US session. Market participants will look for a clear answer to the crucial question of when the tapering will start, which, in turn, will play a key role in influencing the US dollar in the near term.

In the meantime, the shaky risk sentiment extended some support to the safe-haven USD and acted as a headwind for the perceived riskier aussie. Worries about the economic fallout from the fast-spreading Delta variant of the coronavirus, along with China's regulatory crackdown, has sent ripples through the global equity markets.

Apart from this, the greenback was further supported by a modest uptick in the US Treasury bond yields. The combination of factors, to a larger extent, offset slightly better-than-expected Australian consumer inflation figures. In fact, the headline CPI rose 0.8% during the second quarter, though did little to impress bullish traders.

From a technical perspective, the AUD/USD pair's inability to gain any meaningful traction clearly suggests that the near-term bearish trend might still be far from being over. Hence, any meaningful upside back towards the 0.7400 mark might be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

Technical levels to watch

AUD/USD

Overview
Today last price 0.7354
Today Daily Change -0.0011
Today Daily Change % -0.15
Today daily open 0.7365
 
Trends
Daily SMA20 0.7434
Daily SMA50 0.7578
Daily SMA100 0.7647
Daily SMA200 0.7596
 
Levels
Previous Daily High 0.7389
Previous Daily Low 0.7336
Previous Weekly High 0.7417
Previous Weekly Low 0.7288
Previous Monthly High 0.7794
Previous Monthly Low 0.7477
Daily Fibonacci 38.2% 0.7357
Daily Fibonacci 61.8% 0.7369
Daily Pivot Point S1 0.7338
Daily Pivot Point S2 0.7311
Daily Pivot Point S3 0.7286
Daily Pivot Point R1 0.7391
Daily Pivot Point R2 0.7416
Daily Pivot Point R3 0.7443

 

 

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