As Wall Street declines, the AUD/USD exchange rate is stuck at 0.6740.

Market Analytics and Considerations

Key Points

• AUD/USD holds onto respectable gains as sentiment turns negative.
• The US Dollar is supported by an increase in US Treasury bond yields, which drags down the Australian Dollar.
• AUD/USD: Woes around 0.6800 and drops by 50 pip below 0.6750.

Since December 19, the Australian Dollar (AUD) has risen toward the 0.6800 range and seems to have flattened out around the 0.6680 mark. However, the choppy last trading week of 2022 discourages traders from initiating new long positions prior of the monthly, quarterly, and year-end movement, which typically supports the US Dollar (USD). The AUD/USD exchange rate is currently 0.6785.

Following the announcement of US Pending Home Sales for November, which fell to a 37.8% Yearly shrinkage from a prior reading of a 37percentage – point loss, while on a monthly basis, slid somewhat better but stayed at -4percentage points vs. estimates of -4.6%, investor confidence became negative. The National Association of Realtors study states that registrations fell to their lowest point since before the epidemic in records going right back into 2001.

In addition, the Richmond Fed Manufacturing Index increased to 1 from -9 the prior month, outpacing the decline.

Despite the fact that mood increased throughout the Asian and European periods as a result of China easing Covid-19 limitations, it has just turned negative. Wall Street entered negative territory as a result of concerns that the full openness of China would trigger a new round of price increases. As it gets ready to restore its frontiers on January 8, Chinese officials have started issuing passports and travel papers to citizens of Hong Kong.

Under the support of US rates, the US Dollar Index, a measure of the American Dollar’s (USD) worth in relation to a group of other people, is regaining some territory above 104.000 and is rise 0.12%. The benchmark 10-year note yield has become 3.879%, up three and a half basis points.

Technical prognosis for the AUD/USD exchange rate

Technically, the AUD/USD trades between the 200-day Exponential Moving Average (EMA) and the 20-day EMA, which are both located around 0.6822 & 0.6718, correspondingly. The AUD/USD dipped after reaching a 2 top of 0.6801. The Relative Strength Index (RSI) has been unable to breach above the 60 barrier, indicating that purchasing impetus is waning. The 20-

day EMA at 0.6718 would serve as the next support line if the AUD/USD fell under 0.6750. The 0.6700 mark will be revealed if the former is breached.

An alternative explanation would have the 200-day EMA at 0.6822 as the first resistance level for the AUD/USD pair, backed by 0.6800.

Daily SMA