AUD/USD surges the most in nine weeks on SVB and Fed-led risk-on mood


Share:

  • AUD/USD stays on the front foot near intraday high as bulls cheer the biggest daily gains in almost two months.
  • SVB-led risk-on mood joins receding hawkish Fed bets to drown US Dollar.
  • Fresh fears surrounding US-China ties fail to derail risk-on mood.

AUD/USD bulls celebrate the biggest daily gains since early February around the 0.6665-70 hurdle during early Monday in Europe. The Aussie pair’s latest inaction could be linked to its struggle to overcome the five-week-old descending resistance line amid the broadly risk-on mood, as well as the US Dollar weakness.

While portraying the mood, S&P 500 Futures bounced off a 2.5-month low, up nearly 1.60% around 3,960 by the press time. It’s worth noting that the Asia-Pacific equities trade mixed as they’re yet to overcome Friday’s bond and stock market rout, as well as bear the burden of China-linked fears.

A new term for China’s President Xi Jinping keeps the Sino-American tension on the table as he said earlier on Monday that they must resolutely oppose the interference of external forces, 'split' of Taiwan. It’s worth mentioning that Wall Street saw the red on Friday while the US bond yields also dropped the most in a month amid fears emanating from the Silicon Valley Bank (SVB) fallout.

However, the US Treasury Department, Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) took joint actions to tame the risks during the weekend.  While reacting to the US regulators’ actions, US President Joe Biden said, “American people and American businesses can have confidence that their bank deposits will be there when they need them.”

The fallout of the SVB and Signature Bank flagged fragile conditions of the US banks, which in turn pushed back hopes of more rate hikes from the US Federal Reserve (Fed). With this in mind, Goldman Sachs expects to rate hike in March while the Fed Fund Futures also cut previously upbeat odds favoring a 0.50% rate lift in the Fed rate in March.

Amid these plays, US Dollar Index (DXY) drops to the lowest level in a month, down 0.80% near 103.80.

Looking ahead, Tuesday’s US Consumer Price Index (CPI) for February to direct immediate market moves. Following that, the Retail Sales and preliminary readings of the Michigan Consumer Sentiment Index for March, up for publishing on Wednesday and Friday, will be crucial for AUD/USD traders to watch. At home, Thursday’s Aussie jobs report will be observed to reconfirm recent dovish bias surrounding the Reserve Bank of Australia (RBA).

Technical analysis

A five-week-old descending resistance line, around 0.6665 by the press time, challenges the AUD/USD bulls.

Additional important levels

Overview
Today last price 0.6666
Today Daily Change 0.0090
Today Daily Change % 1.37%
Today daily open 0.6576
 
Trends
Daily SMA20 0.6777
Daily SMA50 0.6885
Daily SMA100 0.6765
Daily SMA200 0.6777
 
Levels
Previous Daily High 0.664
Previous Daily Low 0.6564
Previous Weekly High 0.677
Previous Weekly Low 0.6564
Previous Monthly High 0.7158
Previous Monthly Low 0.6698
Daily Fibonacci 38.2% 0.6593
Daily Fibonacci 61.8% 0.6611
Daily Pivot Point S1 0.6547
Daily Pivot Point S2 0.6517
Daily Pivot Point S3 0.6471
Daily Pivot Point R1 0.6623
Daily Pivot Point R2 0.667
Daily Pivot Point R3 0.6699

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD bounces from 1.0800 in the US afternoon

EUR/USD bounces from 1.0800 in the US afternoon

EUR/USD lost its bullish momentum and declined toward 1.0800 in the second half of the day on Thursday. The upbeat Jobless Claims and February PMI data from the US helps the US Dollar find demand and weighs on the pair.

EUR/USD News

GBP/USD drops below 1.2650 as USD rebounds

GBP/USD drops below 1.2650 as USD rebounds

GBP/USD reversed its direction and declined below 1.2650 after rising above 1.2700 earlier in the day. Renewed US Dollar strength on the back of better-than-forecast Jobless Claims and upbeat PMI data makes it difficult for the pair to keep its footing.

GBP/USD News

Gold challenging the $2,020 mark

Gold challenging the $2,020 mark

Spot Gold eased from a fresh multi-week high of $2,034.86. The US Dollar edged sharply lower during Asian trading hours and remained on the back foot through most of the European session but turned higher ahead of Wall Street’s opening. 

Gold News

Bitcoin price breakdown possible as European Central Bank says BTC fair value is still zero

Bitcoin price breakdown possible as European Central Bank says BTC fair value is still zero

Bitcoin price’s horizontal consolidation continues to extend, but the support level is wearing thin as the days go by. As the current state of uncertainty continues, it is imperative to remember that markets tend not to wait so long.

Read more

Nvidia drives global markets to records, as European stocks defy German economic gloom

Nvidia drives global markets to records, as European stocks defy German economic gloom

Markets are a sea of green after Nvidia’s earnings report has boosted global risk appetite and stock markets surging. Boost to Nvidia’s share price after another monster earnings report and super forecast has led to a collective relief rally across markets.

Read more

Forex MAJORS

Cryptocurrencies

Signatures