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AUD / USD remains defensive around 0.7350

  • AUD / USD was down for the second session in a row, although it lacked follow-up selling.
  • Covid-19 nervousness weighs on the Australian dollar; a weaker USD helped limit any deeper losses.

The AUD / USD pair remained depressed during the early North American session, although it has managed to recover around 20 pips from daily lows and was last seen trading near 0.7350.

The pair extended Friday’s modest pullback from around 0.7400 and was down on the first day of a new trading week. This marked the second day in a row of a negative move and was sponsored by growing concerns about the fast-spreading delta variant of the coronavirus.

Despite a weeks-long stay-at-home order, Australia’s most populous New South Wales state reported an increase in new COVID-19 cases on Monday. Aside from this, protests over the weekend in the country’s largest cities fueled concerns about new infections, which could result in an extension of the restrictions.

The ongoing spread of COVID-19 affected global risk sentiment, which was evident from a generally softer tone around equity markets. This put some additional pressure on the Australian dollar perceived as riskier, although the weaker US dollar helped limit losses for the AUD / USD pair.

Risk aversion in the markets triggered a sharp drop in US Treasury yields. In fact, the benchmark 10-year US government bond yield reversed a significant portion of last week’s gains to the 1.30% level and sparked some new selling around the USD.

Meanwhile, the inability of the AUD / USD pair to capitalize on last week’s good bounce from annual lows suggests that the short-term downtrend may still be far from over. That said, investors could refrain from aggressive bets ahead of the FOMC meeting, starting Tuesday.

The Fed’s monetary policy update will play a key role in influencing short-term dollar price dynamics and provide a new directional boost to the AUD / USD pair. Meanwhile, events surrounding the coronavirus saga will be scrutinized for some business opportunities.

Technical levels to observe

AUD/USD

Overview
Today last price 0.7353
Today I change daily -0.0013
Today daily change% -0.18
Today they open every day 0.7366
Trends
Daily SMA20 0.7451
SMA50 daily 0.7594
SMA100 daily 0.7653
SMA200 daily 0.7592
Levels
Previous Daily High 0.7402
Previous Daily Low 0.7356
Previous weekly high 0.7417
Previous Weekly Low 0.7288
Previous monthly maximum 0.7794
Previous Monthly Low 0.7477
Daily Fibonacci 38.2% 0.7374
Daily Fibonacci 61.8% 0.7384
Daily Pivot Point S1 0.7348
S2 daily pivot point 0.7329
S3 Daily Pivot Point 0.7302
R1 daily pivot point 0.7394
Daily pivot point R2 0.7421
R3 daily pivot point 0.744

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