AUD/USD bounces away from two-week lows, holds below 0.6900

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  • AUD/USD trimmed some of its intraday losses to a two-week low, though it lacked follow-through.
  • Falling US bond yields acted as a dollar headwind and offered some support to the pair.
  • Recession fears capped gains in the risk-sensitive Aussie ahead of Fed Chairman Powell’s speech.

The pair AUD/USD it stopped its intraday decline near the 0.6960 area and recovered a few points from the two-week low hit on Wednesday. The pair was last seen below 0.6900, down nearly 0.20% on the day.

The further decline in US Treasury yields did not help the dollar to take advantage of its modest rise, which in turn was seen as a key factor supporting the AUD/USD pair. That said, rising recession concerns continued to weigh on investor sentiment and acted as a headwind for the risk-sensitive Aussie.

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Traders also seemed reluctant and might prefer to stay on the sidelines ahead of the key risk event: Fed Chairman Jerome Powell’s speech at the ECB forum in Sintra. Market participants remain divided on the prospects for more aggressive rate hikes from the Fed. Therefore, Powell’s comments will be scrutinized for clues on the path of policy tightening.

This will play a key role in influencing the USD price dynamics and providing a new directional boost to the AUD/USD pair. From a technical point of view, the price of the pair rebounded from near the monthly low, so it is prudent to wait for some selling below the 0.6850 area before positioning for another downward move.

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However, the fundamental backdrop still appears to be tilting in favor of bearish traders, suggesting that any recovery attempts risk fading quickly. The AUD/USD pair remains vulnerable to further decline beyond the year lows, around the 0.6830-0.6825 region touched in May, and aims to test the round 0.6900 level.

Technical levels

AUD/USD

Panorama
Last Price Today 0.6887
Today’s Daily Change -0.0018
Today’s Daily Change % -0.26
Today’s Daily Opening 0.6905
Trends
20 Daily SMA 0.7037
50 Daily SMA 0.7072
100 Daily SMA 0.7208
200 Daily SMA 0.7229
levels
Previous Daily High 0.6965
Previous Daily Minimum 0.6903
Previous Maximum Weekly 0.6997
Previous Weekly Minimum 0.6868
Monthly Prior Maximum 0.7267
Previous Monthly Minimum 0.6828
Daily Fibonacci 38.2% 0.6927
Daily Fibonacci 61.8% 0.6941
Daily Pivot Point S1 0.6884
Daily Pivot Point S2 0.6862
Daily Pivot Point S3 0.6822
Daily Pivot Point R1 0.6946
Daily Pivot Point R2 0.6986
Daily Pivot Point R3 0.7008

Source: Fx Street

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