AUD/USD Price Analysis: Gains Capped by 0.72 amid RU-UA Tension
AUD/USD Daily Outlooks

AUD/USD Price Analysis: Gains Capped by 0.72 amid RU-UA Tension

  • The AUD/USD pair pulled back sharply from its weekly high on Thursday.
  • The Australian dollar’s risk appetite and perceptions have been affected by tensions between Russia and Ukraine.
  • The RBA rate hike bet in 2022 provided some support and helped limit the decline.

The AUD/USD price analysis leaves no clear clues for any directional bias at the moment. Although the Fed’s less hawkish tone provides some support. With a slight intraday loss, the AUD/USD price was the last trading in a range of 0.7180-0.7185 after rebounding a few pips off the Asian session low.

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The AUD/USD pair fell to a daily low near 0.7100, following an early rise to a weekly low near 0.7215. Ukraine’s firing of mortars and rockets into the LPR region has weighed on global risk sentiment, making the US dollar a safe haven and driving flows away from the riskier Australian dollar.

Lugansk’s Donbas region lies the Lugansk People’s Republic, an area internationally recognized as part of Ukraine but ruled by Russia-backed separatists. Amid fears of an impending Russian invasion of Ukraine, Russia announced a troop withdrawal from its border with Ukraine. But, according to the US and NATO, there are no signs of de-escalation in the field.

At least for now, the downward movement remains moderate given the Reserve Bank of Australia (RBA) increasing interest rates. Two of Australia’s largest creditors, Australia and New Zealand Banking Group Ltd. and the Commonwealth Bank of Australia, recommended an initial increase by September 2022, which held down losses for the AUD/USD pair.

Market participants are now anticipating the release of the US economic report, including the Philadelphia Fed Manufacturing Index, weekly initial jobless claims data, and housing market data. Nevertheless, market risk sentiment will continue to be strongly influenced by geopolitical developments. With this and the US Dollar’s price action, there should be some trading opportunities around the AUD/USD pair.

AUD/USD price technical analysis: Bulls lack strength

aud/usd price analysis

The AUD/USD price could not sustain above 0.7200 area and is now rangebound around 0.7180. However, the price managed to stay above the key SMAs on the 4-hour chart. The previous 4-hour price bar closed in the middle with a very high volume. The background is slightly bullish. This shows that the pair continue the upside up to a certain extent.

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For a better trading opportunity, we will wait for the buying climax to appear around 0.7220 to 0.7250 area. Otherwise, it is prudent to stay out of trading as there is no clear clue of any trend at the moment.

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Saqib Iqbal

Saqib Iqbal

Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He's well-known for his day trading reviews and multiple timeframe analysis.