AUD/USD remains below 50-DMA despite recent recovery
- The shift in Fed policymakers’ comments drives the AUD/USD off-late.
- Lack of economic data from Australia diverts market attention to politics/US statistics.
- 50-DMA continues to limit the pair’s near-term upside towards 0.7000 round-figure.
Even after recovering some of the latest losses during early-day, the AUD/USD pair still trades beneath 50-day moving average (50-DMA) as it takes the rounds to 0.6960 amid initial Asian session on Wednesday.
The Aussie pair recently stepped back from the short-term key MA after some of the US Federal Reserve members, including the Chairman, reiterated their support for present monetary policy while giving less dovish statements.
Current run-up might have influenced by the latest comments from the St Louis Fed President Bullard who said that two rate cuts by year-end would provide a soft landing to the US economy.
Risk sentiment has been sluggish off-late mainly due to the Fed-led market pessimism and the US-Iran geopolitical tension. The global risk gauge, 10-year US treasury yield, remains under 2.0% by the press time.
It should also be noted that the US and Chinese leaders are ready to meet during the G20, giving a sigh of relief after a deadlocked trade negotiations. However, no breakthrough is expected to arrive from the talks in Japan.
With no major data from Australia scheduled for publishing, traders might concentrate more on the US Durable Goods Orders for May. The headline is expected to inch up from -2.1% to +0.2% whereas Nondefense Capital Goods ex-Aircrafts might also take a U-turn from downwardly revised -1.0% figure to +0.1% growth. Additionally, comments from the US Federal Reserve Bank of San Francisco Mary C. Daly will also be observed for fresh impulse.
Technical Analysis
A successful break of 0.6966 comprising 50-DMA becomes necessary for the buyers to aim for 0.7000 round-figure whereas 100-DMA level near 0.7037 can entertain the bulls afterward.
On the other hand, a downside break of 0.6936, encompassing 21-DMA, could recall 0.6900 and 0.6880 back to the chart
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
