- The Australian dollar falls as the Wall Street session draws to a close, down 0.14%.
- Yield on 10-year US Treasuries returns to 1.40% threshold, dollar bolsters.
- AUD / USD Technical Outlook: Biased to the downside, although upside risks persist.
During the American session, the AUD/USD it is trading lower, trading at 0.7111 at the time of writing. Market sentiment remains pessimistic, spurred by the omicron outbreak around the world. The UK and some European countries are reimposing social restrictions as government health offices scramble to contain the fourth wave.
Meanwhile, the US dollar index recovers some of its losses, almost unchanged at 96.55, as US Treasury yields with the 10-year yield recover the 1.40% threshold, down two basis points, to stand at 1,423%.
An absent economic agenda leaves the AUD / USD at the mercy of market sentiment and dollar dynamics, including domestic political developments and demand for US Treasuries.
AUD / USD Price Forecast: Technical Outlook
The AUD / USD daily chart shows that the pair has a bearish bias. The double top formed in the month, still in play as the December high of 0.7186 breaks decisively to the upside. However, despite the Aussie weakness across the board, Monday’s price action broke through the “neck line” around the December 14 low of 0.7090. However, it failed to get a follow up, pushing AUD / USD around 0.7111.
If the USD bulls manage to break clearly below the neckline, the first support would be the 0.7000 figure, followed by 0.6900, and then the June 12, 2020 low at 0.6799.
To the upside, the first resistance would be the daily high on December 17 at 0.7184. A sustained break above that level could pave the way for further gains, with the 0.7200 figure as the next resistance, followed by the confluence of the 50- and 100-day moving averages (DMAs) at the 0.7290-0.7300 area.
Technical levels
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