- US dollar maintains daily gains as Wall Street turns negative.
- AUD/USD falls for the third day in a row, further correcting last week’s rally.
The recovery of AUD/USD from the weekly low reached during the European session at 0.7084 it found resistance around the 0.7130 area. At time of writing, she trades at 0.7115, in negative territory for the day, on track for the lowest close in ten days, amid a stronger US dollar.
The dollar found buyers thanks to risk aversion. AUD/USD moved from lows amid a rally in stock prices, but during the US session, US stocks turned negative reaching new lows and weakening the pair again.
If the decline in stock prices continues, AUD/USD is likely to drop to test 0.7100. Next, next support comes in at 0.7085 (daily low), followed by 0.7070 and 0.7050. On the upside, the Australian dollar needs to reclaim 0.7130 to ease downside pressure. The next resistance is located at 0.7150 followed by 0.7167.
On Wall Street, the Dow Jones fell 0.95% and the S&P 500 fell 0.58%, but the Nasdaq gained 0.25%. Concerns over tensions between Russia and Ukraine weigh on market sentiment. US yields are rising despite the demand for haven assets. The US 10-year bond yield bounced from a weekly low of 1.90% to 2%. The move helped the dollar lock in daily gains.
On Tuesday the economic calendar shows key events. The Reserve Bank of Australia will publish the Minutes of its last meeting while in the US it will publish the producer price index. Attention will also continue to be paid to diplomacy.
Additional technical levels
Source: Fx Street
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