KEY POINTS:
- US bond yields extend the rises and propel the US dollar into the currency market.
- The Australian dollar is weakened by sharp falls in oil prices despite good Australian labor data.
- In this article we present the most important support and resistance levels for AUD / USD on the daily price chart.
It may interest you: EUR / USD Stumbles Down To Key Channel Support, Bearish Signals Begin To Accentuate
The AUD / USD (Australian dollar / US dollar) eliminated Wednesday’s gains and fell 0.5% to 0.7758 in Thursday’s session, depressed by further increases in US Treasury yields who supported the U.S. currency, and due to the sharp drop in crude oil prices, a key export from Australia.
The yield on 10-year US debt rose to a new 13-month high at 1,720% on Thursday despite the Federal Reserve reiterating on Wednesday that it was in no rush to normalize its monetary policy in the face of growing expectations of a solid recovery. of the pandemic and inflationary pressures on the horizon.
At the beginning, these central bank statements had put pressure on the USD in the foreign exchange market against the main currencies such as the Australian dollar (AUD), which was strengthened this morning by the good labor data from Australia for the month of February. For reference, the ocean economy generated 88.7 thousand new jobs last month against a forecast of 30 thousand places, while the unemployment rate fell below 6% for the first time since March 2020 to 5.8%.
However, these headwinds to the AUD evaporated in the hours that followed with the rebound in US government bond yields and the biggest daily drop in oil prices since June, a key Australian export.
From a technical point of view, the AUD / USD also indicated that a downward correction could be looming considering its recent collision with a confluence zone of resistance at the 0,7837 (R1), where the maximums of March 2 and 3, 2020 converge with the uptrend line (R2) drawn from last year’s low.
The latest downward correction from these levels could bring the pair back to 0,7700(S1) roughly short-term, support region defined by the February 26 low. Here, a breakout could result in a more severe pullback to the March 2021 low in the 0,7621 (S2).
DAILY TECHNICAL GRAPH – AUD / USD
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Written by Daniel Castaño, Research Team
Follow me on twitter: @DCastanoFX
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