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AUD/USD falls to new daily low around 0.6550 area amid modest USD rally

  • AUD/USD fails to maintain its modest initial gains amid some USD buying.
  • The Fed's hawkish outlook supports elevated US bond yields and supports the Dollar.
  • A slight pullback in equity markets pushes monetary flows further away from the risk-sensitive AUD.

The AUD/USD pair continues its struggle to find acceptance or consolidate its strength beyond the 100-day Ssimple moving average (SMA) and attracts some sellers near the 0.6580 region on Friday. The decline accelerates during the first half of the European session and drags the pair to a new daily low, around the 0.6550 area, amid a modest rally in the US Dollar (USD).

Against the backdrop of persistent geopolitical tensions stemming from conflicts in the Middle East, hopes that central banks around the world will soon cut interest rates are dampening recent optimism. This is reflected in a slight pullback in equity markets, helping the safe-haven USD gain some positive traction and weighing on the risk-sensitive AUD. Furthermore, the Dollar is supported by the hawkish outlook of the Federal Reserve (Fed), which in turn puts some downward pressure on the AUD/USD pair.

Minutes from the late January meeting of the Federal Open Market Committee, released on Wednesday, showed great uncertainty about how long borrowing costs would need to remain at their current level to reduce inflation to the 2% target. by the central bank. Furthermore, comments from a number of influential Fed policymakers suggested that the US central bank is in no rush to cut interest rates. This remains support for elevated US Treasury yields and allows the dollar to further recover from a near three-week low hit on Thursday.

There will be no relevant economic data released in the United States on Friday, so the Dollar will be at the mercy of US bond yields. Apart from this, the broader risk sentiment could boost demand for the Dollar as safe haven and provide some momentum to the AUD/USD pair. However, the pair remains on track to post modest gains for the third consecutive week, although the lack of follow-through buying warrants some caution on the part of the bulls before positioning for additional gains.

AUD/USD technical levels

Overview
Latest price today 0.6554
Daily change today -0.0002
Today's daily variation -0.03
Today daily opening 0.6556
Trends
daily SMA20 0.6536
daily SMA50 0.6636
SMA100 daily 0.6552
SMA200 Journal 0.6564
Levels
Previous daily high 0.6595
Previous daily low 0.654
Previous weekly high 0.6545
Previous weekly low 0.6443
Previous Monthly High 0.6839
Previous monthly low 0.6525
Fibonacci 38.2% daily 0.6574
Fibonacci 61.8% daily 0.6561
Daily Pivot Point S1 0.6532
Daily Pivot Point S2 0.6509
Daily Pivot Point S3 0.6477
Daily Pivot Point R1 0.6587
Daily Pivot Point R2 0.6618
Daily Pivot Point R3 0.6642

Source: Fx Street

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