AUD/USD trims two-day losses and reclaims 0.7300 on positive market mood
- The AUD/USD bounces off weekly losses though is down 0.65% in the week.
- Russia-Ukraine tussles and strong demands of both sides do not permit an advance in talks.
- AUD/USD Technical Outlook: At press time above the 200-DMA, a close above it would resume the uptrend.
The AUD/USD snaps two days of losses in the week and is surging during the North American session on a sudden improved market move, as portrayed by European equities rising, while US stock futures are in the green. At press time, the AUD/USD is trading at 0.7328.
Geopolitical headlines are still in control of newswires, so AUD/USD traders need to know the market mood. In the last hour, Ukrainian President Deputy Chief of Staff Zhovkva said that “Ukraine is ready for a diplomatic solution,” a headline that caused a slight jump on risk appetite, and Zhovkva also added that Ukraine wouldn’t trade a “single inch” of its territory.
That said, we are back at square one, as Russia demands to recognize Donetsk/Luhansk as sovereign Republics and Crimea as a Russian region. Late in the day, Ukraine and Russia Foreign Minister would meet in Turkey, as reported on Monday.
Apart from this, the Reserve Bank of Australia (RBA) Governor Philip Lowe reiterated that the bank would be “patient” regarding monetary policy. He emphasized that wages growth and underlying inflation in Australia are softer than in other countries, giving the central bank room to assess incoming data and geopolitical developments. When asked about a rate hike this year, he said it is “plausible.”
AUD/USD overnight was subdued near weekly lows within the 0.7264-80 range. However, as the European markets opened and risk-aversion abated, the pair rallied 50-pips towards the 100-hour simple moving average (SMA), sitting at 0.7330.
In the meantime, the Australian economic docket featured the Westpac Consumer Confidence for March, which came worse than expectations, though triggered no movement in the pair. Across the pond, the US JOLTs openings for January rose by 11.263M higher than the 10.925M foreseen.
AUD/USD Price Forecast: Technical outlook
On Tuesday, the AUD/USD closed above the 38.2% Fibonacci. That alongside February 10 daily high previous resistance-now-support around that area, and improved market mood spurred a jump on Today’s price action, also attributed to softer greenback demand.
The AUD/USD on its way north breach the 200-day moving average (DMA) at 0.7315. In the case of a move downwards, it would be first support. Nevertheless, a daily close above it would resume the uptrend. In that event, the AUD/USD first resistance would be 0.7367, followed by the 0.7400 mark and the YTD high at 0.7441, achieved on March 7.
