- AUD/USD caught fresh offers on Friday and built on overnight bounce from two-week low.
- The crisis between Russia and Ukraine supported the safe-haven USD and capped the perceived riskier AUD.
- Attention will remain on the outcome of the NATO summit and the incoming geopolitical headlines.
The pair AUD/USD it maintained its strong offered tone heading into the American session and was last seen near the daily high just above 0.7200.
The pair regained positive traction on the last day of the week amid some technical buying after the strong bounce overnight from static support at 0.7100-0.7090. Apart from this, the rally lacked an obvious fundamental catalyst and remained limited amid the worsening situation in Ukraine, which acted as a tailwind for the US dollar.
In the latest development, Ukrainian media have reported that Russian forces have entered the Obolon district, which is approximately 10 km from Kiev, the capital city. Adding to this, calls to disconnect Russia from the so-called SWIFT global payment system kept investors on edge and extended support for safe-haven assets, including the dollar.
For his part, Russian Foreign Minister Sergei Lavrov said that they want the Ukrainian people to be independent and have the possibility to freely define their destiny. Lavrov further added that Russia will guarantee the demilitarization of Ukraine, but does not see any possibility of recognizing the current Ukrainian government as democratic.
Lavrov also said that Ukrainian President Volodymyr Zelenskiy was lying and said that he was ready to discuss Ukraine’s neutral status. This dashed hopes of a ceasefire and continued to weigh on investor sentiment, which was evident in the prevailing cautious mood in equity markets and justified bullish traders’ caution.
Investors are now looking forward to the outcome of an extraordinary virtual summit of NATO Heads of State and Government. Aside from this, the incoming headlines surrounding the Russia-Ukraine saga will influence broader market risk sentiment, which, in turn, will influence USD demand and give the AUD/USD pair some momentum.
Technical levels
Source: Fx Street
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