AUD/USD bounces off two-week low, lacks follow-through amid risk-off/sustained USD buying – by hareshmenghani AUDUSD Recession Fed Bonds Currencies
session. The pair is currently placed near the top end of its daily trading range, though any meaningful upside seems elusive and the attempted recovery runs the risk of fizzling out rather quickly.
Growing worries about a global economic downturn continue exerting downward pressure on commodity prices, which, along with a softer risk tone, might act as a headwind for the risk-sensitive aussie. Apart from this, the prevalent bullish sentiment surrounding the US dollar, bolstered by hawkish Fed expectations, should further contribute to keeping a lid on the AUD/USD pair.
The fundamental backdrop suggests that the path of least resistance for the AUD/USD pair is to the downside. Even from a technical perspective, the overnight break below the 50-day SMA could be seen as a fresh trigger for bearish traders. Hence, any subsequent strength might still be seen as a selling opportunity amid absent relevant market-movingNevertheless, the AUD/USD pair remains on track to register heavy weekly losses.
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