Forex

AUD/USD Down Amidst Risk-off Mood

Nikos Tzabouras Written by Nikos Tzabouras
  • AUDUSD
    (${instrument.percentChange}%)

AUD/USD –H4

The Aussie managed to take advantage of the greenback's demise last week and post profits, but markets have become even more aggressive in regards to the Fed's rate hike path.

At the time of writing, CME's Fed WatchTool was showing 88.2% probability of lift-off in March, while 4-hikes within the year is the scenario with the highest probability and potential for a fifth increase. [1]

Along with risk-off mood from the Covid situation and tensions in the Middle East and Ukraine, the pair is downbeat, running its third straight negative day.

From a technical prospective, AUD/USD is in risk of breaking below the ascending trend-line from December's 2021 lows. This would mean breaking below the channel of the flag formation, which in turn could potentially open the door towards 0.7161-50.

As long as it manages to defend this level and can avert fresh 2022 lows (0,7128) it does not lose the ability to push back. This could lead to new week highs (0.7230), but a significant improvement in sentiment would be needed in order to surpass 0.7278.

The next leg off the move will likely be determine by market sentiment and as such, the mood in which US traders will return form their long weekend, could be crucial.

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Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 24 Apr 2024 https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html#

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