– AUD/USD picks up bids to lick its wounds at the lowest levels in seven weeks.
– Market consolidates ahead of major data/events, seek more clues.
– Strong US data, hawkish Fed bets and geopolitical concerns previously cheered Aussie bulls.
– US/China PMIs, Australia Retail Sales eyed for clear directions.
AUD/USD prints mild gains around 0.6735 during the initial Asian session on Monday as bears take a breather around the lowest levels since early January following a two-week downtrend.In doing so, the Aussie pair traders seem to brace for this week’s key data amid a lack of major directives.However, the hawkish Fed concerns and strong US data keeps the bears hopeful even as the Reserve Bank of Australia (RBA) officials signalled more rate hikes ahead.
That said, the last week’s RBA Minutes and comments from RBA
Governor Philip Lowe, as well as Deputy Governor Guy Bullock, signalled further rate lifts are on the table.However, the hawkish concerns at the Aussie central bank weren’t as strong as those at the Federal Reserve (Fed), which in turn drowned the AUD/USD pair.
It should be noted that the
US Dollar Index (DXY) marked a four-week uptrend by the end of Friday, grinding near the highest levels in seven weeks of late, as strong US data, especially relating to inflation, underpinned hawkish Federal Reserve concerns.
Among them, Friday’s US Personal Consumption Expenditures (PCE) gained major attention as the headline PCE Price Index rose to 5.4% YoY versus 5.3% prior and 4.9% market forecasts.Further, the more relevant Core PCE Price Index, known as Fed’s favorite inflation gauge, rose to 4.7% YoY, compared 4.6% prior and analysts’ forecast of 4.3%.
On the other hand, Cleveland
Fed President Loretta Mester told CNBC on Friday that his funds’ rate was above the median in December and still thinks they need to be somewhat above 5%.
The policymaker also added that inflation risks still tilted to the upside.On the same line, Federal Reserve Bank of Boston President Susan Collins said, “More rate hikes needed to deal with ‘too high’ inflation.” Furthermore, Governor Philip Jefferson said, “Wage growth in the US is running too high to be consistent with a timely and sustainable return to the Federal Reserve’s 2% inflation objective.”
It’s woth mentioning that US Treasury Secretary Janet Yellen also highlighted the US inflation concerns on the sideline of the Group of 20 (G20) meetings and backed the US Dollar bulls.
Apart from the US data and hawkish Fed concerns, the geopolitical fears surrounding Russia and China also weigh on the AUD/USD price, due to its ties with China, as well as because of the pair’s risk-barometer status.
In the last week, China released its 12-point peace plan on the Ukraine-Russia war but failed to gain accolades due to its ties with Russia.Following that, Germany’s Finance Minister Christian Lindner said on the sidelines of the G20 finance ministers and central bank governors’ meeting on Friday that there cannot be any business as usual with Russia as long as this war continues.
On the same line, European Commission President Ursula von der Leyen on Friday, “Sanctions are sharply eroding Russia’s economic base.” EU’s von der Leyen also stated that China has already taken side for Russia, they have to view their principles in that light.
Against this plays, Wall Street benchmarks posted the biggest weekly fall in 2023 while the US two-year Treasury bond yields rose to the highest levels since early November 2022.
Moving on, AUD/USD traders should keep their eyes on the risk catalysts ahead of this week’s US ISM Manufacturing PMI, Services PMI, Durable Goods Orders and China’s official PMIs.Also important to watch will be Aussie Retail Sales data for January and the fourth quarter (Q4)
Gross Domestic Product (GDP).
Technical analysis
AUD/USD rebound remains elusive unless providing a daily close beyond 0.6740 resistance confluence, comprising the 100-DMA and previous support line from late November 2022.
Additional important levels
|Overview|
|Today last price||0.6736|
|Today Daily Change||0.0009|
|Today Daily Change %||0.13%|
|Today daily open||0.6727|
|Trends|
|Daily SMA20||0.693|
|Daily SMA50||0.6893|
|Daily SMA100||0.6726|
|Daily SMA200||0.6801|
|Levels|
|Previous Daily High||0.6824|
|Previous Daily Low||0.6719|
|Previous Weekly High||0.6921|
|Previous Weekly Low||0.6719|
|Previous Monthly High||0.7143|
|Previous Monthly Low||0.6688|
|Daily Fibonacci 38.2%||0.6759|
|Daily Fibonacci 61.8%||0.6784|
|Daily Pivot Point S1||0.6689|
|Daily Pivot Point S2||0.6651|
|Daily Pivot Point S3||0.6584|
|Daily Pivot Point R1||0.6795|
|Daily Pivot Point R2||0.6862|
|Daily Pivot Point R3||0.69|
Information on these pages contains forward-looking statements that involve risks and uncertainties.
Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets.You should do your own thorough research before making any investment decisions.
FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements.It also does not guarantee that this information is of a timely nature.Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress.
All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned.The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations.The author makes no representations as to the accuracy, completeness, or suitability of this information.
FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use.Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
Recommended content
Editors’ Picks
AUD/USD licks its wounds above 0.6700 as key PMI data, Aussie Q4 GDP loom
[]https://www.fxstreet.com/currencies/audusd
AUD/USD prints mild gains around 0.6735 during the initial Asian session on Monday as bears take a breather around the lowest levels since early January following a two-week downtrend.
AUD/USD News
EUR/USD eyes more downside below 1.0540 as US PCE propels hawkish Fed bets
[]https://www.fxstreet.com/currencies/eurusd
The EUR/USD pair is juggling in a narrow range above 1.0540 in the early Asian session.The major currency pair is likely to show more weakness after surrendering the immediate support of 1.0540 ahead.
EUR/USD News
Gold: Strong US Dollar signals XAU/USD fall towards sub-$1,800 zone
[]https://www.fxstreet.com/markets/commodities/metals/gold
Gold price stays depressed at the lowest levels in two-months after declining in the last five consecutive days, as well as printing four-week south-run.
Gold News
Everything you need to know about Ethereum’s Shanghai hard fork and why it matters
Ethereum network is preparing for the Sepolia testnet at 4 pm UTC on February 28 and the Shapella hard fork in March 2023.The combination of Shanghai and Capella hard forks marks a milestone in the development of the largest altcoin in the crypto ecosystem.
Read more
Soft landing, to no landing, to crash landing
[]https://www.fxstreet.com/analysis/soft-landing-to-no-landing-to-crash-landing-202302241952
The Deep State of Wall Street has changed the narrative from an economy that will probably undergo a just a soft landing, to one that will now experience no landing at all.
This specious propaganda is derived from the situation where we find CPI falling from 9.1% last summer, to 6.4% in January of this year.
https://www.fxstreet.com/analysis/soft-landing-to-no-landing-to-crash-landing-202302241952.
