AUDUSD SIGNAL : AUD/USD Outlook: Eyeing descending trend-line breakout amid hopes for diplomacy in Ukraine
- AUD/USD witnessed good two-way price moves on Thursday and finally settled with modest losses.
- Contradicting Russia-Ukraine headlines weighed on the sentiment and the perceived riskier aussie.
- Hopes for diplomacy in Ukraine, RBA rate hike bets assisted the pair to regain traction on Friday.
AUDUSD SIGNAL : The AUD/USD pair shot to a one-week high on Thursday, albeit struggled to find acceptance above the 0.7200 mark and finally settled with modest losses. The pair witnessed some intraday selling and dropped to mid-0.7100s in a knee-jerk reaction to reports of mortar fire in eastern Ukraine. In fact, Russia-backed rebels accused Ukrainian forces of shelling their territory. This, in turn, triggered a fresh wave of the global risk-aversion trade, which provided modest lift to the safe-haven US dollar and weighed on the perceived riskier aussie.
The risk sentiment, however, stabilized a bit after the Russian Ministry of Defense said that around 10 military convoys have left Crimea and released a video showing a logistics unit coming back to its base after the completion of drills. Adding to this, the latest update from US satellite image company, Maxar Technologies, showed that Russia has pulled back some equipment from the Ukraine border. This, along with a sharp pullback in the US Treasury bond yields, acted as a headwind for the USD and assisted the pair to attract some dip-buying at lower levels.
AUDUSD SIGNAL : The latest geopolitical developments raised uncertainty about the Fed’s tightening plans to combat stubbornly high inflation. This comes on the back of less hawkish FOMC meeting minutes released on Wednesday, which, along with the global flight to safety, dragged the US bond yields lower. In fact, Policymakers agreed that it would be appropriate to remove policy accommodation at a faster pace than anticipated if inflation does not move down as they expect. The minutes, however, failed to reinforce market expectations for a 50 bps rate hike in March.
On the economic data front, the US Weekly Initial Jobless Claims unexpectedly rose to 248K during the week ended February 11 and the previous reading was also revised slightly higher to 225K. Separately, the Philly Fed Manufacturing Index fell more than anticipated, to 16 in February from 23.2 in the previous month. Apart from this, the mixed US housing market data – Building Permits and Housing Starts – also did little to impress the USD bulls or provide any impetus. Meanwhile, investors remained on the edge amid a flood of headlines on the Russia-Ukraine crisis.
The US Defense Secretary Lloyd Austin dismissed Russia’s claims that it is withdrawing troops and said that the US is seeing some Russian forces inching closer to the Ukrainian border. Moreover, the USD President Joe Biden said there was every indication Russia was planning to invade in the next few days and was preparing a pretext to justify it. This, along with weakness in the US equity markets, capped gains for the major. That said, a combination of factors helped limit the downside, rather assisted the pair to catch fresh bids during the Asian session on Friday.
AUDUSD SIGNAL : The US Secretary of State agreed to a meeting with Russia’s foreign minister and raised hopes for a diplomatic solution to the East-West standoff over Ukraine. Adding to this, rising bets for an interest rate hike by the Reserve Bank of Australia (RBA) extended some support to the AUD/USD pair. Market participants now look forward to the release of the US Existing Home Sales data, due later during the early North American session. This, along with the US bond yields and the broader market risk sentiment, will influence the USD and provide some impetus.
Technical outlook
From a technical perspective, the pair was last seen flirting with a resistance marked by a downward sloping trend-line extending from November 2021. A convincing breakthrough will be seen as a fresh trigger for bullish traders and set the stage for additional gains. The pair might then accelerate the momentum towards testing monthly high, around mid-0.7200s. This coincides with 100-day SMA, which if cleared should push spot prices towards the next relevant hurdle, near the 0.7270-0.7280 region, en-route the 0.7300 mark and 2020 high, around the 0.7315 area.
On the flip side, mid-0.7100s, or the overnight swing low now seems to protect the immediate downside ahead of the 0.7125 area. Any subsequent slide might continue to find decent support near the 0.7100-0.7090 region. Sustained weakness below will negate the positive outlook and make the pair vulnerable. The downward trajectory could further get extended towards the 0.7060-0.7055 region before the pair eventually drops back to the key 0.7000 psychological mark.
Confuse Which Broker is best ? , Here you can find the best regulated broker
AUDUSD SIGNAL : AUD/USD Outlook: Eyeing descending trend-line breakout amid hopes for diplomacy in Ukraine
AUD/USD witnessed good two-way price moves on Thursday and finally settled with modest losses.
Contradicting Russia-Ukraine headlines weighed on the sentiment and the perceived riskier aussie.
Hopes for diplomacy in Ukraine, RBA rate hike bets assisted the pair to regain traction on Friday.
AUDUSD SIGNAL : The AUD/USD pair shot to a one-week high on Thursday, albeit struggled to find acceptance above the 0.7200 mark and finally settled with modest losses. The pair witnessed some intraday selling and dropped to mid-0.7100s in a knee-jerk reaction to reports of mortar fire in eastern Ukraine. In fact, Russia-backed rebels accused Ukrainian forces of shelling their territory. This, in turn, triggered a fresh wave of the global risk-aversion trade, which provided modest lift to the safe-haven US dollar and weighed on the perceived riskier aussie.
The risk sentiment, however, stabilized a bit after the Russian Ministry of Defense said that around 10 military convoys have left Crimea and released a video showing a logistics unit coming back to its base after the completion of drills. Adding to this, the latest update from US satellite image company, Maxar Technologies, showed that Russia has pulled back some equipment from the Ukraine border. This, along with a sharp pullback in the US Treasury bond yields, acted as a headwind for the USD and assisted the pair to attract some dip-buying at lower levels.
AUDUSD SIGNAL : The latest geopolitical developments raised uncertainty about the Fed’s tightening plans to combat stubbornly high inflation. This comes on the back of less hawkish FOMC meeting minutes released on Wednesday, which, along with the global flight to safety, dragged the US bond yields lower. In fact, Policymakers agreed that it would be appropriate to remove policy accommodation at a faster pace than anticipated if inflation does not move down as they expect. The minutes, however, failed to reinforce market expectations for a 50 bps rate hike in March.
On the economic data front, the US Weekly Initial Jobless Claims unexpectedly rose to 248K during the week ended February 11 and the previous reading was also revised slightly higher to 225K. Separately, the Philly Fed Manufacturing Index fell more than anticipated, to 16 in February from 23.2 in the previous month. Apart from this, the mixed US housing market data – Building Permits and Housing Starts – also did little to impress the USD bulls or provide any impetus. Meanwhile, investors remained on the edge amid a flood of headlines on the Russia-Ukraine crisis.
The US Defense Secretary Lloyd Austin dismissed Russia’s claims that it is withdrawing troops and said that the US is seeing some Russian forces inching closer to the Ukrainian border. Moreover, the USD President Joe Biden said there was every indication Russia was planning to invade in the next few days and was preparing a pretext to justify it. This, along with weakness in the US equity markets, capped gains for the major. That said, a combination of factors helped limit the downside, rather assisted the pair to catch fresh bids during the Asian session on Friday.
AUDUSD SIGNAL : The US Secretary of State agreed to a meeting with Russia’s foreign minister and raised hopes for a diplomatic solution to the East-West standoff over Ukraine. Adding to this, rising bets for an interest rate hike by the Reserve Bank of Australia (RBA) extended some support to the AUD/USD pair. Market participants now look forward to the release of the US Existing Home Sales data, due later during the early North American session. This, along with the US bond yields and the broader market risk sentiment, will influence the USD and provide some impetus.
Technical outlook
From a technical perspective, the pair was last seen flirting with a resistance marked by a downward sloping trend-line extending from November 2021. A convincing breakthrough will be seen as a fresh trigger for bullish traders and set the stage for additional gains. The pair might then accelerate the momentum towards testing monthly high, around mid-0.7200s. This coincides with 100-day SMA, which if cleared should push spot prices towards the next relevant hurdle, near the 0.7270-0.7280 region, en-route the 0.7300 mark and 2020 high, around the 0.7315 area.
On the flip side, mid-0.7100s, or the overnight swing low now seems to protect the immediate downside ahead of the 0.7125 area. Any subsequent slide might continue to find decent support near the 0.7100-0.7090 region. Sustained weakness below will negate the positive outlook and make the pair vulnerable. The downward trajectory could further get extended towards the 0.7060-0.7055 region before the pair eventually drops back to the key 0.7000 psychological mark.
Confuse Which Broker is best ? , Here you can find the best regulated broker