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AUD/USD again battles 0.7200 following dovish Fed

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  • AUD/USD seesaws around the fresh high since April 2019.
  • US Federal Reserve announcement came out as anticipated with Chairman Jerome Powell stressing fiscal support.
  • Dismal prints of Aussie CPI, an announcement from Queensland failed to defy the Aussie bulls.
  • Australia’s Export-Import Price Index and Building Permits will be the immediate catalysts.

AUD/USD stays on the front foot around 0.7190 at the start of Thursday’s Asian session. The aussie pair recently picked up the bid as the US Federal Reserve (Fed) reiterated the previous bearish bias amid the coronavirus (COVID-19) crisis. Also fueling the quote could be Chairman Jerome Powell’s press conference that emphasized on the need to act. In doing so, the quote shrugged off mostly upbeat data from the US, in contrast to Aussie inflation numbers, as well as the pandemic situation in the Pacific major.

Fed met consensus but Powell pushed for greenback weakness…

Policymakers showed grave concerns during the latest Federal Open Market Committee (FOMC) meeting while keep flaunting the readiness to act, which in turn makes September meeting the key. Though, comments from Chairman Jerome Powell exerted additional downside pressure on the US dollar as he raised hopes of inflation targeting and further fiscal support. While the US central bank refrained from any action, September becomes important for the American monetary policy decision-makers after the latest announcement to stretch stimulus expiry from September till the year ends.

Other than the Fed, virus woes also weighed on the US currency as 1,200 deaths in a day, the highest since May, increased the American death toll due to the deadly virus beyond 150K. In Australia, Queensland will ban entries from Victoria starting from Saturday 01:00 AM citing worries over the pandemic.

It’s worth mentioning that the Australian Foreign Minister Marise Payne’s comments on having no intention to hurt the relationship with China offered additional help to the AUD. As a result, the AUD/USD prices ignored record slump in the second-quarter (Q2) inflation numbers while also paying a little heed to better-than-forecast US economics.

Against this backdrop, US 5-year Treasury yields dropped to a record low of 0.25% with the 10-year counterpart down to 0.577% by the end of Monday. Further, Wall Street cheered expectations of more stimulus and the Fed’s push for that despite deadlock in the phase 4 package talks in the US.

Moving on, Australia’s Import Price Index and Export Price Index for Q2 and June month’s Building Permits can offer immediate direction to the quote. However, major attention will be given to the qualitative catalysts and the US preliminary GDP for Q2.

Technical analysis

Higher high formation in a week favors the buyers targeting April 2019 top surrounding 0.7207 ahead of challenging the previous year top close to 0.7300. On the contrary, a four-day-old ascending trend line, at 0.7160 now, can offer immediate support ahead of 0.7065/60 area comprising July 24 low and June 10 high.

ADDITIONAL IMPORTANT LEVELS

OVERVIEW
Today last price 0.7186
Today Daily Change 29 pips
Today Daily Change % 0.41%
Today daily open 0.7157
 
TRENDS
Daily SMA20 0.7014
Daily SMA50 0.6899
Daily SMA100 0.6585
Daily SMA200 0.6693
 
LEVELS
Previous Daily High 0.7177
Previous Daily Low 0.7113
Previous Weekly High 0.7184
Previous Weekly Low 0.6972
Previous Monthly High 0.7065
Previous Monthly Low 0.6648
Daily Fibonacci 38.2% 0.7152
Daily Fibonacci 61.8% 0.7137
Daily Pivot Point S1 0.7121
Daily Pivot Point S2 0.7084
Daily Pivot Point S3 0.7056
Daily Pivot Point R1 0.7185
Daily Pivot Point R2 0.7213
Daily Pivot Point R3 0.725

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