- AUD/USD gains some traction on Wednesday amid some USD selling.
- Expectations for less aggressive Fed rate hikes and stability in equity markets weigh on the dollar.
- Investors expect US macro data to build some momentum ahead of the FOMC meeting minutes.
The pair AUD/USD attracts some buying near the 0.6630 zone on Wednesday and rises to a 2-day high of 0.6671 during the European session, though it lacks continuation. The pair is currently just above the 0.6650 level and remains well supported by modest US dollar weakness.
In fact, the dollar index, which measures the performance of the dollar against a basket of currencies, extends its decline from the highs of a week and loses ground for the second day in a row. the growing acceptance that the Federal Reserve will slow the pace of its tightening cycle of monetary policy turns out to be a key factor that continues to weigh on the dollar. Apart of this, stability in stock markets It weighs even more on the safe-haven USD and benefits the risk-sensitive Aussie.
That being said, the concern about potential economic headwinds from a rebound in new COVID-19 cases in China and the imposition of new lockdowns keep optimism at bay. In addition, recent statements by various Fed officials suggest that the US central bank could continue to raise borrowing costs to control inflation. This, in turn, should cap any deeper losses for the dollar and limit the rally in the AUD/USD pair. Traders may also refrain from entering aggressive positions and would prefer to wait for further catalyst from the release of the November FOMC meeting minutes.
Therefore, it will be prudent to wait for strong continuation buying before confirming that the pullback from the two-month highs reached last week is over and positioning for further gains. Ahead of the key event, traders could reference US macroeconomic data on Wednesday, such as durable goods orders and the usual weekly initial jobless claims. This, along with broader risk sentiment, will influence demand for the USD and provide some momentum for the AUD/USD pair.
AUD/USD technical levels
|Last price today||0.6659|
|Today I change daily||0.0013|
|Today’s daily change in %||0.20|
|today’s daily opening||0.6646|
|previous daily high||0.6652|
|previous daily low||0.6596|
|Previous Weekly High||0.6798|
|previous weekly low||0.6634|
|Previous Monthly High||0.6548|
|Previous monthly minimum||0.617|
|Daily Fibonacci of 38.2%||0.663|
|Daily Fibonacci of 61.8%||0.6618|
|Daily Pivot Point S1||0.6611|
|Daily Pivot Point S2||0.6576|
|Daily Pivot Point S3||0.6556|
|Daily Pivot Point R1||0.6666|
|Daily Pivot Point R2||0.6686|
|Daily Pivot Point R3||0.6721|
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.