- AUD/USD retreats after touching over a fresh five-month top during the Asian session on Monday.
- The cautious market mood underpins the safe-haven USD and weighs on the risk-sensitive Aussie.
- The technical setup favours bullish traders as the focus shifts to the RBA policy meeting on Tuesday.
The AUD/USD pair attracts some intraday sellers in the vicinity of the 0.6700 mark, or over a five-month top touched during the Asian session on Monday and drops to a fresh daily low in the last hour. Spot prices currently trade around the 0.6660 area, down just nearly 0.10% for the day, and the downside is sponsored by a modest US Dollar (USD) uptick.
Investors turn cautious in the wake of a further escalation of tensions in the Middle East and fears of another COVID-19-like respiratory illness outbreak in China cap the recent upswing in the global equity markets. This, in turn, is seen lending some support to the safe-haven Greenback and undermining the risk-sensitive Australian Dollar (AUD). Apart from this, some repositioning trade ahead of the Reserve Bank of Australia (RBA) policy meeting on Tuesday exerts downward pressure on the AUD/USD pair.
From a technical perspective, the recent sustained move beyond the very important 200-day Simple Moving Average (SMA) and Friday's close above the 61.8% Fibonacci retracement level of the July-October fall was seen as a fresh trigger for bullish traders. Moreover, oscillators on the daily chart are comfortably in the positive territory and are still far from being in the overbought zone. This suggests that the path of least resistance for the AUD/USD pair is to the upside amid dovish Federal Reserve (Fed) expectations.
Meanwhile, any further decline could find support near the 0.6600 mark ahead of last week's swing low, around the 0.6570-0.6565 region. Some follow-through selling, however, could drag the AUD/USD pair further towards the 0.6530 intermediate support en route to the 0.6500 psychological mark. This is followed by the 100-day SMA, around the 0.6475-0.6470 zone, and the 0.6430 area, or the 50-day SMA. Failure to defend the said supports might negate the positive outlook and shift the near-term bias in favour of bearish traders.
On the flip side, the multi-month peak, or levels just ahead of the 0.6700 round figure, now becomes an immediate hurdle. Bulls might wait for sustained strength beyond the said barrier before placing fresh bets. The AUD/USD pair might then climb to the next relevant hurdle near the 0.6740 region before aiming to reclaim the 0.6800 mark. The momentum could get extended further towards the July monthly swing high, around the 0.6895 region, with some intermediate resistance near the 0.6845-0.6850 region.
AUD/USD daily chart
Technical levels to watch
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.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
![EUR/USD stays in positive territory above 1.0850 after US data](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-euro-and-dollar-banknotes-17371247_XtraSmall.jpg)
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
![GBP/USD stabilizes above 1.2850 as risk mood improves](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/strong-pound-weak-dollar-17536259_XtraSmall.jpg)
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
![Gold rebounds above $2,380 as US yields stretch lower](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-gm187363896-28836378_XtraSmall.jpg)
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
![Avalanche price sets for a rally following retest of key support level](https://editorial.fxstreet.com/images/Avalanche/Avalanche_XtraSmall.jpg)
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
![The election, Trump's Dollar policy, and the future of the Yen](https://editorial.fxstreet.com/images/Macroeconomics/Events/US%20Elections/Donald_Trump_closeup_XtraSmall.jpg)
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.