Appraisal of the AUD/USD exchange rate: Squeezing volatility as the US Dollar Index settles down

Market Analytics and Considerations

Key Notes

AUD/USD is fluctuating erratically in a band of 0.6960-0.6978 due to market caution.

When a Rising Stream forms, it denotes an upward trend inside a specific area.

The 20-EMA has crossed over the Australian dollar asset, which suggests that a concentration has been added.

In the Asian session, the AUD/USD cross is making erratic movements in a little larger range of 0.6960-0.6978. The Australian currency has depreciated in line with the trajectory of the US Dollar Index (DXY). After a protracted weekend, the market is apprehensive as the USD Index displays lateral displacement profile.

Additionally, traders’ risk tolerance has decreased due to rising US Treasury yields. The yield on US 10-year Treasury bonds has increased to almost 3.54 percent S&P500 futures are now showing a muted showing in the midst of the market’s nervousness.

On a hourly scale, the AUD/USD currency duo is trading in a Rising Band graph, which denotes the continuance of the north-side trend in a defined territory. After an unsuccessful breakthrough on Monday, the Australian Dollar was not able to sustain the Australian asset at its high levels.

Trading Tendency

The 20-period Exponential Moving Average (EMA) has crossed so over asset at 0.6964, indicating lateral displacement auction is imminent.

The Relative Strength Index (RSI) (14) is now also contributing to the volatility compression filtering by looping between 40.00 & 60.00.

The Australian dollar could rise to its Aug peak at 0.7137 if it makes a strong push over Monday’s top at 0.7019. The main will go toward the peak from Jun 9 at 0.7200 on a breach just above August peak.

On the other hand, a downward movement underneath the bottom of Dec 29 near 0.6710 would push the Aussie deeper into the lows of Dec 22 around 0.6650 and Nov 21 around 0.6585.