AUD/USD Analysis: Looking to Break 0.74, Slowed by Hawkish Fed

• AUD/USD pair trades near 0.7400 area as the Greenback finds no respite.
• The pair could not significantly rise amid the hawkish tone of Fed.
• US PPI data and bonds yield can further influence the Aussie price action.

The AUD/USD price analysis is bullish on Friday. The AUD/USD pair traded just below the 0.7400 area, wobbling during the first half of the European session.

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Following a lack of direction in the previous session, the AUD/USD pair recovered its positive dynamics on the last day of the week and was supported by the general weakness in the US dollar. Moreover, as equity markets rebounded over the past few days, risk momentum eroded the safe-haven dollar and benefited Aussie.

However, the bulls failed to capitalize on the move before they found a hurdle above 0.7400. In response to the fall in safe-haven demand, US Treasury yields rose sharply. With this and expectations of a tightening Fed policy, the AUD/USD pair enjoyed a tailwind and could not rise significantly.

The Fed’s stimulus from the pandemic era is expected to be largely abandoned soon, investors believe. Michelle Bowman suddenly said that the Fed was about to announce tapering. It was in line with the hawkish statements made by various Fed officials this week.

So, it is prudent to wait for a strong renewed uptrend before making new bullish claims and confirming the recent pullback. As the North American session begins, participants anticipate the US PPI coming out to gain short-term stimulus.

As a result, the yield on US bonds could influence the dollar exchange rate. Additionally, traders can take advantage of short-term opportunities offered by the AUD/USD pair based on market risk sentiment.

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AUD/USD price technical analysis: 20-SMA to support

The AUD/USD price is well above the 20-period SMA on the 4-hour chart. The price is facing a hurdle around 0.7400 area. However, the volume of the last two up bars is rising. The recent pullback may stay limited near the 20-period SMA. Fresh buying may emerge at these levels, and the rally can lead to a break above the 0.7400.

On the downside, if the price breaks below the 20-period SMA, it may go for 200-period SMA around 0.7350.

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