- AUD / USD is quickly recovering around 45 pips and approaching daily highs.
- The USD is struggling to hold intraday gains and offers some support to the pair.
- A modest rally in US bond yields could prop up the USD and limit the pair’s gains.
- The market’s attention will continue to be on the release of the US consumer inflation figures for February.
The pair AUD/USD has managed to recover a significant part of its initial fall and has recovered above the 0.7700 level during the first half of the European session on Wednesday.
The US dollar has struggled to hold onto its intraday gains, which, in turn, has been seen as a key factor that has helped the AUD / USD pair to attract some purchases near the region of 0.7665-70. A turnaround in global risk sentiment, as shown by a strong rebound in US equity futures, has hit the safe-haven US dollar and offered some support to the riskier Australian dollar. perceived.
Nevertheless, a modest rally in US Treasury yields could continue to prop up the USD. Apart from this, the optimistic US economic outlook could help limit any decline in the USD. and limit any significant rally for the AUD / USD pair. Investors remain hopeful that the successful launch of the COVID-19 vaccine and massive fiscal spending in the United States will lead to a powerful rebound in the economy.
Meanwhile, the reflation trade has fueled the expectations of a possible rebound in US inflation And it has raised doubts that the Fed will maintain ultra-low interest rates for a longer period. This could deter investors from opening aggressive directional positions ahead of Wednesday’s release of the US consumer inflation figures, scheduled to be published at the beginning of the American session.
With inflation still a hot topic, the latest US CPI figures will play a key role in influencing USD price dynamics ahead of the FOMC’s monetary policy meeting next week. This, coupled with broader market risk sentiment, could give AUD / USD some momentum and allow investors to seize some short-term opportunities.
AUD / USD technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
