AUD/USD struggles near two-month low, holds above 0.7200 ahead of US PMIs

AUD/USD was seen consolidating its recent losses to the lowest level since early October.
The USD bulls took a brief pause near a 16-month peak and extended support to the pair.
Hawkish Fed expectations acted as a tailwind for the USD and capped gains for the major.

Haresh Menghani FXStreet

The AUD/USD pair seesawed between tepid gains/minor losses through the mid-European session and consolidated its recent slide to the lowest level since October 1. The pair was last seen hovering around the 0.7225-20 region, nearly unchanged for the day.

The US dollar bulls took a brief pause following the recent strong run-up to a 16-month peak, which, in turn, assisted the AUD/USD pair to find some support ahead of the 0.7200 round-figure mark. However, a combination of factors kept a lid on any meaningful recovery for the major.

US President Joe Biden formally nominated Jerome Powell to serve as the chairman of the Federal Reserve for a second term and reinforced bets for higher US interest rates. This, in turn, continued pushing the US Treasury bond yields higher, which act as a tailwind for the greenback.

Apart from this, concerns over the rising number of COVID-19 cases in Europe and the reimposition of lockdown measures should limit the downside for the safe-haven greenback. This further collaborated to cap the upside for the AUD/USD pair, warranting caution for aggressive bullish traders.

Even from a technical perspective, the overnight turnaround from the 0.7270-75 area validated an ascending trend-channel breakdown. Some follow-through selling below the 0.7200 mark will reaffirm the negative bias and set the stage for an extension of the recent downward trajectory.

Market participants now look forward to the release of flash US PMI prints for November. This, along with the US bond yields, could influence the USD price dynamics. Traders will further take cues from the broader market risk sentiment for some short-term opportunities around the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price	0.7219
Today Daily Change	-0.0003
Today Daily Change %	-0.04
Today daily open	0.7222

Trends
Daily SMA20	0.7384
Daily SMA50	0.7351
Daily SMA100	0.7355
Daily SMA200	0.7531

Levels
Previous Daily High	0.7273
Previous Daily Low	0.7221
Previous Weekly High	0.7371
Previous Weekly Low	0.7227
Previous Monthly High	0.7557
Previous Monthly Low	0.7191
Daily Fibonacci 38.2%	0.7241
Daily Fibonacci 61.8%	0.7253
Daily Pivot Point S1	0.7204
Daily Pivot Point S2	0.7186
Daily Pivot Point S3	0.7152
Daily Pivot Point R1	0.7257
Daily Pivot Point R2	0.7291
Daily Pivot Point R3	0.7309

Author

Haresh Menghani

FXStreet

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

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