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AUD/USD Current Price: 0.7489
- Inflation and the Eastern European crisis undermined the market’s mood.
- Australian Retail Sales are foreseen up by 1% in February.
- AUD/USD has begun correcting lower, although the AUD remains resilient.
The AUD/USD pair gapped lower at the weekly opening, closing the gap before resuming its slide. The pair ends the day with modest losses trading in the 0.7490 price zone after bottoming for the day at 0.7466. The Australian dollar remains resilient, as it barely gave up, despite the poor performance of equities and a strengthening greenback.
Stocks came under selling pressure amid persistent concerns related to the Russian invasion of Ukraine and its effects on the global economy. Markets talks are hinting at an upcoming round of peace talks in Turkey, although there’s no confirmation yet, neither much room for a diplomatic solution. Russian Foreign Minister Lavrov said that a meeting between the Russian and the Ukrainian presidents would be counter-productive at the time being.
Government bond yields, in the meantime, soared across the world after the Japanese Central Bank jumped to intervene in financial markets for a second time this year, a sign that the current monetary policy is falling short of helping the economy.
On the data front, Australia did not publish relevant data on Monday, but it will release February Retail Sales on Monday, seen up 1% after advancing 1.8% in the previous month.
AUD/USD short-term technical outlook
The daily chart for the AUD/USD pair shows that bulls remain in control, although chances of a bearish correction have increased. The pair keeps developing well above all of its moving averages, with the 20 SMA heading firmly higher above the longer ones. Technical indicators, in the meantime, have partially lost their bullish strength but remain near overbought readings.
In the near term, and according to the 4-hour chart, the risk skews to the downside, although declines look corrective and could be short-lived. The pair is now below a flat 20 SMA, while technical indicators hover just above their midlines, with the Momentum heading lower and the RSI flat at around 73. A break below the aforementioned daily low should lead to a test of the 0.7390 level, where bulls should come back to maintain the long-term trend in place.
Support levels: 0.7465 0.7430 0.7390
Resistance levels: 0.7520 0.7555 0.7590
View Live Chart for the AUD/USD
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