AUD/USD trades with modest gains around 0.7435 area, lacks bullish conviction

  • AUD/USD edged higher on Friday and recovered a part of the overnight losses.
  • COVID-19 jitters continued acting as a headwind for the aussie and capped gains.
  • Rebounding US bond yields might underpin the USD and favours bearish traders.

The AUD/USD pair traded with a mild positive bias heading into the European session, albeit lacked any follow-through buying. The pair was last seen trading around the 0.7435-40 region, up nearly 0.15% for the day.

The pair managed to find some support near the 0.7420 region, just ahead of YTD lows and edged higher on the last trading day of the week, recovering a part of the overnight losses. However, a combination of factors held bulls from placing any aggressive bets and kept a lid on the AUD/USD pair.

Investors remain worried about the spread of the highly contagious Delta variant of the coronavirus. In fact, the Australian state of Victoria was ordered into a five-day lockdown on Thursday following a spike in COVID-19 infections, which, in turn, acted as a headwind for the AUD/USD pair.

Meanwhile, COVID-19 jitters continued weighing on investors' sentiment and underpinned the safe-haven US dollar, which was further supported by a modest pickup in the US Treasury bond yields. This was seen as another factor that contributed to cap gains for the perceived riskier aussie.

Apart from this, hawkish Fed expectations further underpinned the greenback. Despite the Fed Chair Jerome Powell's dovish testimony, investors seem convinced that the US central bank will tighten its monetary policy sooner than anticipated amid rising inflationary pressure.

The fundamental backdrop seems tilted in favour of bearish traders and supports prospects for a further near-term depreciating move for the AUD/USD pair. Hence, any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

Even from a technical perspective, the range-bound price action witnessed over the past two weeks or so constitutes the formation of a rectangle on the daily chart. Given the recent downfall from June monthly swing highs, this might still be categorized as a bearish continuation pattern.

A convincing break below the 0.7400 mark will reaffirm the negative outlook and set the stage for additional losses for the AUD/USD pair. Market participants now look forward to the release of the US Retail Sales data for a fresh impetus later during the early North American session.

Technical levels to watch


Today last price 0.743
Today Daily Change 0.0007
Today Daily Change % 0.09
Today daily open 0.7423
Daily SMA20 0.7507
Daily SMA50 0.7645
Daily SMA100 0.7676
Daily SMA200 0.7586
Previous Daily High 0.7489
Previous Daily Low 0.741
Previous Weekly High 0.7599
Previous Weekly Low 0.7409
Previous Monthly High 0.7794
Previous Monthly Low 0.7477
Daily Fibonacci 38.2% 0.744
Daily Fibonacci 61.8% 0.7459
Daily Pivot Point S1 0.7392
Daily Pivot Point S2 0.7361
Daily Pivot Point S3 0.7313
Daily Pivot Point R1 0.7472
Daily Pivot Point R2 0.752
Daily Pivot Point R3 0.7551



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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD eases below 1.1300 amid firmer yields, Fed’s Powell eyed

EUR/USD remains pressured towards 1.1250, reversing 2021’s biggest daily gains as the US dollar rebounds with the Treasury yields. Global scientists, policymakers placate fears of Omicron even as national border checks return to the table. German inflation, central bankers’ speeches eyed.


GBP/USD remains vulnerable below 1.3350 amid USD strength, Brexit woes

GBP/USD is trading below 1.3350, lacking any firm directional bias heading into the European session. Renewed USD buying acts as a headwind for the major amid Brexit and covid-related uncertainties. Expectations for a BoE rate hike limit the downside.


Gold faces a wall of resistance en-route $1,800

Gold price rebounds but not out of the woods yet while below $1,800. Omicron covid variant woes will continue to play out, impacting USD and gold.

Gold News

MATIC price eyes 15% advance as Uniswap prepares to migrate to Polygon

MATIC price recently swept the swing lows of a crucial barrier. This development comes as the cryptocurrency market recovers from the COVID-induced crash over the past three days.

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!