- AUD extends losses to two-week lows at 0.7230.
- Worries about the Ukraine war are hurting the Aussie.
- AUD/USD is likely to consolidate between 0.7200 and 0.7340 – UOB Group.
The AUD it has failed to regain footing and continues to push lower on Monday, extending the negative trend of the last two weeks. The pair AUD/USD attempted to bounce off March lows at 0.7230 today, though still unable to extend beyond 0.7250 area.
Geopolitical tensions are hurting the Aussie
The slightly brighter market sentiment has failed to lift the risk-sensitive AUD, which has depreciated around 2.7% after hitting a high of 0.7440 last Monday.
The Aussie’s claim continues to be weighed down by concerns about the Eastern European conflict. More dovish market optimism triggered by talks between Russian and Ukrainian officials, which have pushed European and Asian markets into positive territory, has failed to alter the AUD’s bearish trend so far.
In the absence of key macroeconomic data today, all eyes will be on the release of the minutes of the latest Reserve Bank of Australia meeting, scheduled for Tuesday, and the outcome of the Australian Federal Reserve’s monetary policy meeting. US, which is likely to set the USD’s short-term AUD trajectory.
AUD/USD expected to consolidate above 0.7200 – UOB Group
Taking a slightly broader perspective, the UOB FX research team sees the pair bottoming out near recent lows and capping below 0.7400 for the next few weeks: “While 0.7250 is not broken, the accumulation of momentum has fizzled out. In other words, the AUD is likely still in a consolidation phase and is expected to trade between 0.7200 and 0.7370.”
Technical levels
Source: Fx Street
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