AUD/USD stalls around 0.7000, on risk-off mood and buoyant US Dollar – Crypto News – Crypto News
Connect with us
AUD/USD creeps down towards the 0.6900 mark, in a mixed mood AUD/USD creeps down towards the 0.6900 mark, in a mixed mood

others

AUD/USD stalls around 0.7000, on risk-off mood and buoyant US Dollar – Crypto News

Published

2 years ago

on

  • The US Dollar stages a recovery on Monday after plunging to seven-month lows against a basket of currencies.
  • Australia’s inflation data might spur a reaction by the Reserve Bank of Australia as prices continue to elevate.
  • AUD/USD Price Analysis: In a pullback, though expected to resume its uptrend, above 0.7000.

The Australian Dollar (AUD) loses momentum against the US Dollar (USD) and tumbles back below the 0.7000 figure, on low liquidity conditions, on the observance of Martin Luther King Jr. days. A risk-off impulse bolstered the US Dollar (USD), recovering some ground against most G8 currencies. Therefore, the AUD/USD is trading at 0.6952.

Although the US equities cash market is closed, the S&P 500 and Nasdaq Futures portray a dampened market sentiment. Last week’s US economic data, mainly inflation edging lower and consumer sentiment improved, as reported by the University of Michigan (UoM) poll, augmented speculations that the US Federal Reserve would tighten policy by 25 bps. Also, inflation expectations continue to drop as Americans remain optimistic that the US Central Bank could achieve a “soft landing.”

The US Dollar Index (DXY), which measures the greenback’s value against a basket of six currencies, edges up by almost 0.70%, at 128.730, despite the absence of US traders, a headwind for the AUD/USD.

On the Australian front, its financial calendar featured the Melbourne Institute Monthly Inflation gauge, which showed that inflation decelerated by 0.2%. The latest data showed signs that Australia’s inflation figures remained high, both in terms of quarterly and monthly readings. The annual inflation rate in Australia climbed to an over three-decade high of 7.3% in Q3 of 2022 from 6.1% in Q2. Meanwhile, monthly data showed Australia’s CPI rose to a record high of 7.3% YoY in November, well above the Reserve Bank of Australia’s (RBA) 2% to 3% target, fueling expectations for additional tightening by the RBA,

AUD/USD Price Analysis: Technical outlook

After rallying for three consecutive days to fresh multi-month highs at 0.7019, the AUD/USD it’s retracing to the mid-0.69-0.70 range. Although in bullish territory, the Relative Strength Index (RSI) aims down, contrary to the Rate of Change (RoC), which shows volatility is increasing. Hence, the AUD/USD traders might refrain from opening fresh long positions until the RSI shifts upwards, although the path of least resistance is upwards.

Hence, the AUD/USD key resistance levels would be 0.7000, the new 7-month high hit on January’s 16 sessions at 0.7019, and the August 11 daily high of 0.7136.

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending