AUD/USD flirts with daily lows, around mid-0.7300s ahead of US data

  • AUD/USD witnessed some selling on Thursday and snapped two days of the winning streak.
  • Uncertainty about the Fed’s tapering plans held investors from placing any aggressive bets.
  • Investors now look forward to the US PPI and Jobless Claims for some trading opportunities.

The AUD/USD pair maintained its offered tone through the first half of the European session and was last seen trading near daily lows, just above mid-0.7300s.

The pair struggled to capitalize on this week’s goodish rebound from the 0.7315 region, or the lowest level since July 21 and came under some fresh selling pressure on Thursday. This marked the first day of a negative move in the previous three trading sessions and forced the AUD/USD pair to reverse a part of the previous day’s post-US CPI move up.

Signs of moderating inflationary pressure in the US might have eased fears about an early withdrawal of the stimulus by the Fed. This was evident from declining US Treasury bond yields, which kept the US dollar bulls on the defensive. However, the Fed officials have started to guide the market towards early tapering and higher interest rates as soon as 2022.

Nevertheless, the repricing about the likely timing for policy tightening by the Fed continued acting as a tailwind for the greenback. This comes amid worries about the potential economic fallout from the fast-spreading Delta variant of the coronavirus, which further underpinned the safe-haven USD and exerted some pressure on the perceived riskier aussie.

Market participants now look forward to the US economic docket, featuring the releases of the Producer Price Index (PPI) and the usual Initial Weekly Jobless Claims. This, along with the US bond yields, might influence the USD price dynamics. Traders might further take cues from the broader market risk sentiment for some short-term opportunities around the AUD/USD pair.

Technical levels to watch


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