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  • AUD/USD declines below 0.7350, surrounding near the lows.
  • RBA officials reiterate that the rake hike is no possible before 2024.
  • COVID hits Sydney with the highest infections on Monday.
  • Risk-off sentiment can be seen through declining US 10-year yields.

The AUD/USD pair analysis remains subdued amid prevailing risk-off sentiment and the RBA meeting minutes release.

After a sluggish performance in European trading last week, the AUD/USD exchange rate remains lower. The pair declines freely to the session lows after testing the high just below 0.7350.

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Market participants are watching carefully to see if the tone of leadership has changed since the Reserve Bank of Australia (RBA) released its minutes. As the short-term outlook is uncertain, the health crisis plays a major role in the implementation of adjustment policies. RBA officials have announced that the Bank will continuously evaluate the status of asset purchases while financial conditions remain very favorable.

A few members thought about delaying the continuing decline in asset purchases. While the RBA remains optimistic about resuming growth in 2022 despite current challenges. The panel members said they believe the main scenario for the economy is that no rate hikes will take place before 2024.

COVID fears in Australia

Covid remains a major problem in Australia, with Sydney reporting its deadliest day in a pandemic ever on Monday. The military has shut down large cities and restricted road traffic. As Sydney’s economy is ravaged by the Delta variant, it enters its eighth week of quarantine.

According to official figures, only 26% of people over 16 in Australia have received a full vaccination against the Delta variant. In large cities, there are still strict restrictions, but cases continue to rise. Moreover, the RBA emphasizes that near-term uncertainty has always been associated with the near-term outlook, given the resurgence of the third wave of Covid.

Risk-off sentiment

S&P 500 futures are declining from an all-time high, and by the time of publication, around 0.30 18% were down, reflecting a risk-off mood. The 10-year US Treasury yield is now at 1.26% and declining for the third day in a row.

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AUD/USD technical analysis: 0.7300 to lend temporary support

AUD/USD 4-hour price analysis
AUD/USD 4-hour price analysis

Yesterday, the AUD/USD found rejection at ascending trendline. Today, the price has moved below the 20-period and 50-period SMAs on the 4-hour chart. The average daily range so far is 73%. It means the bears have already played their part. However, the 0.7300 mark may lend some support. But if the level is broken, we can see a deeper retracement towards 0.7250. The pair has a tendency to post fresh YTD lows.

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