- AUD/USD witnessed some selling after rising to fresh one-week tops, around the 0.7135-40 region.
- The prevalent cautious mood benefitted the safe-haven USD and exerted some pressure on the pair.
- Dovish RBA expectations undermined the aussie and contributed to the pair’s pullback from highs.
The AUD/USD pair was seen hovering near the lower end of its daily trading range, with bears awaiting a sustained weakness below the 0.7100 round-figure mark.
The pair failed to capitalize on its early uptick to fresh one-week tops, instead met with some fresh supply near the 0.7135-40 region and has now drifted into the negative territory. The underlying caution in the financial markets extended some support to the safe-haven US dollar and was seen as a key factor exerting some pressure on the perceived riskier Australian dollar.
With less than two weeks to go before the US presidential election, investors remained on the sidelines and awaited a breakthrough in the US stimulus talks. On Thursday, US House of Representatives Speaker Nancy Pelosi reported progress in the legislation for another round of financial aid and said that the aid bill could be passed in the House before the election day.
Market participants, however, seemed unconvinced that the bill could actually pass through the Senate amid strong opposition from Republicans over a bigger stimulus bill. This, coupled with the uncertain US political environment, further weighed on investors' sentiment and benefitted traditional safe-haven assets, including the greenback.
On the other hand, increasing bets that the RBA will cut interest rates in November further undermined the aussie. The AUD/USD pair, for now, seems to have stalled this week's goodish recovery move from the 0.7020 region, or four-week lows touched on Tuesday and remains on track to end the week with modest gains. This makes it prudent to wait for some strong follow-through selling before positioning for any further near-term depreciating move.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Extra gains in the pipeline above 0.6520
AUD/USD partially reversed Tuesday’s strong pullback and regained the 0.6500 barrier and beyond in response to the sharp post-FOMC pullback in the Greenback on Wednesday.
EUR/USD meets support around 1.0650
EUR/USD managed to surpass the key 1.0700 barrier in response to the intense retracement in the US Dollar in the wake of the Fed’s interest rate decision and Chair Powell’s press conference.
Gold surpasses $2,300 as Dollar tumbles
The precious metal maintains its constructive stance and trespasses the $2,300 region on Wednesday after the Federal Reserve left its FFTR intact, matching market expectations.
Bitcoin price reclaims $59K as Fed leaves rates unchanged
The market was at the edge of its seat on Wednesday to see whether the US Federal Reserve (Fed) would cut interest rates during the Federal Open Market Committee (FOMC) meeting.
The market welcomes the Fed's statement
The market has welcomed the Fed statement, and the S&P 500 is higher in its aftermath, the dollar is lower and Treasury yields are falling. There is still only one cut priced in by the Fed.