AUD/USD hangs on to modest intraday gains around 0.6300

  • AUD/USD staged a strong intraday rebound amid fresh dollar selling.
  • A stable risk tone weighs on the safe-haven dollar and benefits the risk-sensitive Aussie.
  • Rising US bond yields and recession fears should cap dollar losses and cap majors.

The AUD/USD pair recovers more than 100 points from the three-day low touched earlier this Thursday and reaches a new daily high, around the 0.6330 zone, during the beginning of the American session. However, the pair pulls back a few points and is currently trading around 0.6300, up around 0.50% on the day.

As investors look beyond the mixed Australian employment data, the onset of fresh US dollar selling turns out to be a key factor offering support to the AUD/USD pair. A modest recovery in risk sentiment – as evidenced by a slightly positive tone around equity markets – undermines the safe-haven dollar and benefits the risk-sensitive Aussie.

Intraday dollar selling continues after the release of the weaker Philadelphia Fed manufacturing index, which remains in contraction territory for the second month in a row in October. This largely overshadows an unexpected drop in US initial jobless claims and does not impress USD bulls or provide them with any momentum.

That said, growing concerns about a deeper global economic downturn should dampen any bullish moves. Aside from this, elevated US Treasury yields, bolstered by expectations of more aggressive Fed tightening, should act as a tailwind for the dollar. This, in turn, warrants some caution for AUD/USD bulls.

Aside from this, the Reserve Bank of Australia’s (RBA) decision to slow the pace of policy tightening earlier this month suggests that the path of least resistance for AUD/USD is to the downside. Therefore, it will be prudent to wait for strong follow-on buying before confirming that it has bottomed out and positioning for further gains.

Technical levels to watch

AUD/USD

Overview
last price today 0.63
Today I change daily 0.0029
Today’s daily variation in % 0.46
Daily opening today 0.6271
Trends
daily SMA20 0.6399
daily SMA50 0.667
daily SMA100 0.6808
daily SMA200 0.7019
levels
Previous daily high 0.6325
Previous Daily Low 0.6251
Previous Weekly High 0.638
Previous Weekly Low 0.617
Previous Monthly High 0.6916
Previous Monthly Low 0.6363
Daily Fibonacci of 38.2%. 0.6279
Daily Fibonacci of 61.8% 0.6297
Daily Pivot Point S1 0.624
Daily Pivot Point S2 0.6209
Daily Pivot Point S3 0.6166
Daily Pivot Point R1 0.6314
Daily Pivot Point R2 0.6356
Daily Pivot Point R3 0.6388

Source: Fx Street

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