AUDUSD is retreating from a multi-week high

AUDUSD pair continues to struggle to break over the 100-day Simple Moving Average (SMA).

The AUDUSD pair continues to struggle to break over the 100-day Simple Moving Average (SMA) and draws some sellers on Tuesday. Interrupting a six-day winning run and reaching a three-week high. Throughout the first part of the European session. The pair maintained its offered tone and is presently trading at the daily low, slightly above the mid-0.6700s.

The risk-off impulse weighs on the risk-averse Australian dollar, notwithstanding minor USD gains.

The mixed Chinese Trade Balance numbers, which show a 1.4% fall in imports and a slower 8.5% increase in exports. Adds to doubt about a speedier rebound in the world’s second-largest economy. This, in turn, dampens investors’ desire for riskier assets, as seen by a generally softer tone. In the equities markets, undermining the risk-sensitive Australian dollar.

Aside from that, some follow-through is required. For the second day in a row, US Dollar (USD) purchasing puts some downward pressure on the AUDUSD pair.

According to the Federal Reserve’s (Fed) Senior Loan Officer Opinion Survey (SLOOS) issued on Monday, tighter lending conditions were caused by aggressive rate rises rather than serious banking sector stress. This, in turn, reduced worries of a full-fledged financial crisis in the United States, leading to an overnight strong rise in US Treasury bond rates.

Furthermore, the risk-aversion urge is considered as another reason favoring the safe-haven Greenback, while the Federal Reserve’s (Fed) less aggressive approach may limit advances.

The Fed’s less aggressive stance might contain the USD and minimize big losses.

Indeed, the US Federal Reserve this week signaled an impending halt in its year-long rate-hiking cycle. And detailed a stricter, data-driven strategy. To hiking rates further. Furthermore, Fed Chair Jerome Powell indicated. That the central bank was nearing the end of the current tightening cycle. This, along with the fact that markets have priced in the prospect of rate reduction. In the second half of this year, keeps US bond rates under control and works as a headwind for the Greenback.

The Australian Dollar (AUD) may continue to benefit from the Reserve Bank of Australia’s (RBA) unexpected 25-basis-point interest-rate boost last week. Furthermore, the Australian central bank suggested that additional tightening of monetary policy may be necessary to guarantee. That inflation returns to goal within a reasonable timeframe.

This, in turn, could hold back traders from initiating strong negative bets around the AUDUSD pair and aid minimize any additional losses, at least for the time being.

Market traders may also want to remain on the sidelines while the latest US consumer inflation statistics are released on Wednesday. The important US CPI report will play a vital role in determining expectations regarding the Fed’s next policy decision, which will fuel USD demand and offer new directional impetus to the AUDUSD pair. This makes it even more sensible to wait for substantial follow-through selling before concluding that spot prices have peaked and preparing for a meaningful corrective decline.

Daily Trends