Bond yield fluctuations are the significant cause of AUD/USD
The Australian dollar has weakened over the last week, with the major causes being the strengthening of the US currency and the decrease in commodity prices.
The rates on Australian and US bonds showed significant differences, but it was the US bond yield that eventually strengthened the US currency and weakened the AUDUSD.
Last Wednesday, the US Consumer Price Index (CPI) was announced. Inflation in the United States has hit its highest level in three decades. This increased the treasury market’s sales demands.
Early last week, the National Australia Bank Business Confidence(NAB) was issued, and it was higher than the previous round. Consumer confidence has risen as well. However, Australia’s Employment Change figures were underwhelming.
The Reserve Bank of Australia’s latest meeting report will be released in the following week. However, it is unlikely to give the market any fresh information.
US Treasury yields will be more relevant for the AUDUSD pair. It remains to be seen if the Federal Reserve of the United States will alter its monetary policy to combat the fast increase in inflation.
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Bull-Scenario:
The AUD/USD is attempting to break through its rising wedge and retest its closest resistance level of 0.74100. If the bulls overcome, the next potential support/resistance level is 0.76000.
Bear-Scenario:
In contrast to this idea, if the bears acquire control of the market, the 0.71 - 0.71400 region may be considered as potential support/resistance.
The rates on Australian and US bonds showed significant differences, but it was the US bond yield that eventually strengthened the US currency and weakened the AUDUSD.
Last Wednesday, the US Consumer Price Index (CPI) was announced. Inflation in the United States has hit its highest level in three decades. This increased the treasury market’s sales demands.
Early last week, the National Australia Bank Business Confidence(NAB) was issued, and it was higher than the previous round. Consumer confidence has risen as well. However, Australia’s Employment Change figures were underwhelming.
The Reserve Bank of Australia’s latest meeting report will be released in the following week. However, it is unlikely to give the market any fresh information.
US Treasury yields will be more relevant for the AUDUSD pair. It remains to be seen if the Federal Reserve of the United States will alter its monetary policy to combat the fast increase in inflation.
-----------------------------------------------
Bull-Scenario:
The AUD/USD is attempting to break through its rising wedge and retest its closest resistance level of 0.74100. If the bulls overcome, the next potential support/resistance level is 0.76000.
Bear-Scenario:
In contrast to this idea, if the bears acquire control of the market, the 0.71 - 0.71400 region may be considered as potential support/resistance.
