- AUD/USD posts two straight days of losses, down 1.2% on Monday.
- Risk aversion triggered by central bank tightening and UK tax cuts amn sentiment; consequently, the dollar is rising.
- Fed officials continue to insist that inflation is “too high.”
The AUD/USD falls almost 1%, due to the strength of the dollar, amid flows seeking the safety of the USD, which rises against most of the G8 currencies due to concerns that the tightening of central banks around the world world, could trigger a recession.
AUD/USD started trading around 0.6515 before hitting the daily high of 0.6537. However, as sentiment continued to sour, the pair fell towards a fresh two-year low around 0.64426, breaking below the May 20, 2020 low at 0.6452. At the time of writing, the AUD/USD is trading 0.6444 below its opening price.
AUD/USD falls to fresh 2-year lows on US dollar push
Recession fears around the world have increased since the US Federal Reserve raised rates by 75 basis points last week. This, coupled with speculation on the UK economy, is keeping the Bank of England (BoE) under pressure, taking sterling to a new year-to-date low. At the same time, most G8 currencies followed suit, weakening against the already strong US dollar.
On the US economic calendar was the Chicago National Activity Index for August, which slowed to 0. Meanwhile, some Fed speakers are crossing the news wires.
On Sunday, Atlanta Fed President Raphael Bostic said he believes the Fed can tame inflation without substantial labor market losses given the current economic slowdown. He says that inflation is “too high”, adding that the US central bank must do everything possible to control it.
Earlier, Boston Fed President Sussan Collins said the unemployment rate has to be higher for the Fed to achieve its inflation target. Collins added that she would like to have “clear and convincing signs” that inflation is cooling off, while she said “a major economic or geopolitical event could push our economy into a recession as policy tightens further.” “.
Westpac analysts lowered the AUD/USD exchange rate target from 0.6900 to 0.6500. “That means that in the remainder of 2022, there will be periods where the AUD trades below the $0.65 level, given the high volatility of the currency markets to date.”
AUD/USD Key Technical Levels
AUD/USD
Overview | |
---|---|
last price today | 0.6444 |
Today I change daily | -0.0068 |
Today’s daily variation in % | -1.04 |
Daily opening today | 0.6526 |
Trends | |
---|---|
daily SMA20 | 0.6755 |
daily SMA50 | 0.6876 |
daily SMA100 | 0.6927 |
daily SMA200 | 0.7094 |
levels | |
---|---|
Previous daily high | 0.6656 |
Previous Daily Low | 0.6512 |
Previous Weekly High | 0.6748 |
Previous Weekly Low | 0.6512 |
Previous Monthly High | 0.7137 |
Previous Monthly Low | 0.6835 |
Daily Fibonacci of 38.2% | 0.6567 |
Daily Fibonacci of 61.8% | 0.6601 |
Daily Pivot Point S1 | 0.6473 |
Daily Pivot Point S2 | 0.642 |
Daily Pivot Point S3 | 0.6329 |
Daily Pivot Point R1 | 0.6617 |
Daily Pivot Point R2 | 0.6709 |
Daily Pivot Point R3 | 0.6762 |
Source: Fx Street
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