- AUD / USD is moving within a tight range during the early part of the European session on Friday.
- Optimistic expectations from the Fed and a rise in US bond yields benefit the USD and limit the pair’s rise.
- Investors, however, appear reluctant to open aggressive positions ahead of the key US CPI report.
The pair AUD/USD ranges from tepid gains to minor losses during the early part of the European session on Friday, looking for a direction around the region of 0.7150.
Following the previous day’s pullback from a nearly two-week high, the AUD / USD pair witnessed range-bound price action on Friday as investors await. the release of US consumer inflation figures for a new boost. The US CPI report will be published at the start of the US session and new clues will be sought on the Fed’s short-term monetary policy outlook.
Markets have been pricing in price Prospects for an early tightening of monetary policies by the Federal Reserve amid concerns about persistent rising inflationary pressures. A stronger figure will reaffirm the Fed’s optimistic expectations, which, in turn, would result in a stronger US dollar and suggest that the recent recovery of the AUD / USD pair from the annual low is over.
Meanwhile, the USD got some support from a further rise in US Treasury yields. Aside from this, a weaker tone around equity markets further benefited the safe-haven USD. Ahead of the key data, a combination of factors could continue to limit any significant rally for the perceived riskier Aussie.
AUD / USD technical levels
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