- AUD/USD regained some positive traction on Friday and rose to fresh weekly highs.
- The easing of tensions between Russia and Ukraine undermined the safe-haven USD.
- The RBA rate hike bets further inspired Australian bulls and continued to support the rise.
The AUD/USD pair pulled back a few pips from weekly highs hit earlier this Friday and was last seen trading just above 0.7200, up 0.35% on the day.
After modest losses the previous day, the AUD/USD pair attracted fresh buying on the last day of the week and built on the recent bounce from the 0.7085 area, or the weekly low hit on Monday. US Secretary of State Antony Blinken has accepted an invitation to meet Russian Foreign Minister Sergei Lavrov at the end of next week and expressed hope for a diplomatic solution to the Ukraine crisis. This led to a modest recovery in global risk sentiment, which undermined the safe-haven US dollar and benefited the perceived riskier Aussie.
The USD was further pressured by uncertainty over the pace of the Fed’s policy tightening cycle, especially after the release of the less aggressive FOMC Minutes on Wednesday. Indeed, policymakers failed to bolster bets for a 50bps rate hike in March, although they agreed it would be appropriate to remove policy accommodation at a faster pace. Additionally, geopolitical developments could force the Fed to adopt a less aggressive policy stance. Aside from this, increasing bets for an eventual RBA rate hike in 2022 extended support for the AUD/USD pair.
Investors, however, remain concerned about the possibility of an imminent Russian invasion of Ukraine. British Foreign Secretary Liz Truss has dismissed Russia’s claims it is withdrawing troops, saying the buildup around Ukraine has shown no signs of slowing. In addition to this, US President Joe Biden accused Russia of fabricating a pretext to invade Ukraine. This could keep a check on market optimism. However, the AUD/USD pair remains on track to end on a positive note and post record gains for the third week in a row.
Market participants are now looking forward to the US Existing Home Sales data to be released later in the first American session. This coupled with new geopolitical developments and broader market risk sentiment will weigh on the USD and produce some trading opportunities around the AUD/USD pair.
Technical levels to observe
AUD/USD
| Overview | |
|---|---|
| today last price | 0.7207 |
| Today I change daily | 0.0016 |
| Today daily change % | 0.22 |
| Today they open every day | 0.7191 |
| Trends | |
|---|---|
| daily SMA20 | 0.7128 |
| daily SMA50 | 0.7173 |
| daily SMA100 | 0.7245 |
| daily SMA200 | 0.7352 |
| levels | |
|---|---|
| Previous daily high | 0.7218 |
| Previous Daily Low | 0.715 |
| Previous Weekly High | 0.725 |
| Previous Weekly Low | 0.7064 |
| Previous Monthly High | 0.7315 |
| Previous Monthly Low | 0.6966 |
| Daily Fibonacci 38.2% | 0.7176 |
| Daily Fibonacci 61.8% | 0.7192 |
| daily pivot point S1 | 0.7154 |
| daily pivot point S2 | 0.7118 |
| Daily Pivot Point S3 | 0.7086 |
| daily pivot point R1 | 0.7223 |
| daily pivot point R2 | 0.7255 |
| daily pivot point R3 | 0.7291 |
Source: Fx Street
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