- AUD/USD finds support near mid-0.7100s as soft US bond yields keep USD bulls on the defensive.
- Rising September Fed rate hike bets and geopolitical risks help limit USD losses, capping the pair.
- Bulls need to wait for a move beyond 0.7200 before placing fresh bets amid a mixed technical setup.
The AUD/USD pair attracts some buyers in the vicinity of mid-0.7100s at the start of a new week, stalling Friday’s retracement slide from its highest level since mid-May. Spot prices, however, lack bullish conviction and remain below the 0.7200 mark through the Asian session.
The US Dollar (USD) trades with a mild negative bias below a two-week high, touched on Friday, and turns out to be a key factor lending some support to the AUD/USD pair. However, reviving bets for an interest rate hike by the US Federal Reserve (Fed) in September, along with escalating US-Iran tensions, act as a tailwind for the safe-haven buck and cap the currency pair.
From a technical perspective, the AUD/USD pair keeps the near-term bias mildly bullish above the 200-period Exponential Moving Average (EMA) at 0.7082. However, momentum is not particularly strong, with the Relative Strength Index (RSI) hovering around a neutral 46 and the Moving Average Convergence Divergence (MACD) indicator slipping slightly into negative territory. This, in turn, suggests that the upside pressure is moderating rather than accelerating.
On the downside, initial support is seen at the current price area around the 0.7135-0.7130 horizontal resistance breakpoint, which should act as an immediate pivot. This is followed by firmer structural demand at the 200-period EMA near 0.7082. As long as AUD/USD holds above this average, pullbacks are likely to attract buyers. Bulls, on the other hand, need to wait for sustained strength and acceptance above the 0.6200 mark before positioning for any further appreciating move.
Leave A Comment