- mThe Australian dollar advances during the week, up 1.30% so far.
- The US dollar remains close to 99.00, although it falters to weigh on the AUD/USD pair.
- US President Biden called for Russia to be removed from the G20.
- AUD/USD Price Forecast: The bias is to the upside unless it trades below 0.7440, which means a correction is underway.
The AUD/USD points up, but the rally seems to be stalling, as Thursday’s price action shows, about to form a doji candle, which means the tug-of-war between bulls and bears has begun, while uncertainty looms. At time of writing, the AUD/USD is trading at 0.7510.
Dollar Holds Firm Amid Positive Market Mood
The mood is one of risk appetite in the North American session, despite the fact that European stock indices finished with losses. On the other hand, US stocks are rising while the dollar shows some resistance to the downside as it trades with gains reflected in the US dollar index up 0.20% to 98.82 . US Treasury yields resume their advance after Wednesday’s losses, with the 10-year Treasury yield rising nearly five basis points to 2,341%.
There has been no market-moving news on the geopolitical front, with the war between Russia and Ukraine still ongoing. US President Joe Biden has arrived at the two-day NATO summit in Brussels. According to a senior US official, Biden told NATO that he supported NATO’s troop surge on the Eastern Front. In addition, Biden called for Russia to be removed from the G-20.
Apart from this, the members of the Fed have continued to grab the headlines. Chicago Fed President Charles Evans said he is “comfortable” with 25 bps hikes in the fed funds rate, but remains “open” to 50 bps hikes if needed. Earlier, Minnesota Fed President Neil Kaskary said 10-year Treasury yields remain low and emphasized the risk of overdoing rate hikes.
A missing Australian economic docket would leave AUD/USD traders drifting to US data on Friday. Meanwhile, across the ocean, February Pending Home Sales, March University of Michigan Consumer Expectations and statements from Fed members would provide a catalyst for AUD/USD traders.
AUD/USD Price Forecast: Technical Outlook
AUD/USD has a bullish bias, as shown by the daily chart, and with the 50-day moving average crossing the 100-DMA each at 0.7223 and 0.7216, respectively.
However, due to the steepness of the rally, plus the Relative Strength Index (RSI) near 68, accelerating towards overbought conditions, the AUD/USD could correct in the short term. However, unless AUD/USD breaks below 0.7440, AUD/USD will continue to rise.
That being said, the first resistance for AUD/USD would be on Oct 28, 2021, with a high of 0.7555. A break of the latter would expose 0.7600, followed by 0.7700.
Source: Fx Street
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