AUDUSD exchange rate is trading below the 200-day SMA.
Through Monday’s Asian session. The AUDUSD pair will continue to trade below the 0.6700 level, or a theoretically crucial 200-day Simple Moving Average (SMA). As it fails to profit on Friday’s substantial bullish advance.
One of the main factors limiting the pair turns out to be the development of modest USD buying.
The likelihood of more Federal Reserve policy tightening later this month continues to support rising US Treasury bond rates. And helps the US Dollar (USD) draw some buyers on the opening day of a new week. In actuality, the USD Index (DXY), which measures the value of the US dollar. The basket of currencies recovers some of Friday’s huge losses to a new monthly low. And proves to be a significant factor acting as a headwind for the AUDUSD pair.
However, diminished bets on the Fed raising interest rates. After the one predicted in July may prevent traders from preparing for large USD gains.
Investors are certain that the US central bank would ease its aggressive attitude sooner rather than later, and their optimism was bolstered by the fairly underwhelming US employment data released on Friday, which showed that the economy gained the fewest jobs in two and a half years in June.
The Australian dollar, a proxy for China, is being kept in check by China’s economic difficulties.
The aforementioned fundamental background implies that the AUDUSD pair should go the route of least resistance. on the plus side, however China’s economic difficulties remain a headwind for the China-proxy Aussie. Worries were exacerbated by lower Chinese inflation data, which showed that the headline CPI declined 0.2% in June but the annual rate stayed unchanged. Furthermore, the Producer Price Index (PPI) declined by 5.4% year on year during the reporting month.
In the absence of any market-moving economic data from the United States, traders will look to Fed Governor Michael Barr’s address on Monday. This, together with US bond rates, may affect the USD and give some support for the AUDUSD pair.
The attention, though, remains on this week’s publication of the latest US consumer inflation numbers, which are scheduled on Wednesday and will play a role. in boosting USD demand in the short run.
