- The AUD/USD is moving a bit higher, trading above A$0.7830, closer to the highs of the day.
- US bond yields are lower, pushing the US Dollar lower as the week draws to a close.
The AUD/USD is trading just above $0.7830, close to the peak of the trading day at $0.7847. The pair has moved up from the lows of $0.7804 as the US Dollar is losing ground across the bond, alongside yields. The benchmark 10-year Treasury yield slipped to around 2.87%, down from the new highs seen earlier in the week, when the Fed released relatively hawkish Meeting Minutes.
The Federal Reserve published another document today, the Monetary Policy Report, which stressed the gradual nature of rate hikes. The semi-annual report precedes the highly-anticipated testimony from Fed Chair Jerome Powell due on February 27th. The report expresses optimism about the economy but also shows no concern about an outbreak of inflation, noting that wages are moving up gradually.
Several FOMC speakers spoke out earlier in the day and also earlier in the week but did not provide groundbreaking headlines. The dovish members remained dovish and the hawkish ones maintained their hawkish stances.
The US Dollar continues tracking bond yields and the AUD/USD also has a direct correlation with stock markets. The calm rise in US equities also supports the AUD/USD.
AUD/USD technical levels
The $0.7804 low seen earlier today is the immediate line of support. It is followed by $0.7771 that was seen on February 14th and by $0.7758 which was a swing low beforehand.
Looking up, the next level to watch beyond the high of $0.7847 is $0.7860, a high recorded earlier in the week, followed by $0.7890, which supported the pair when it traded on higher ground.
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