AUD/USD finds resistance at 0.7130, eyes 0.7100
- US dollar holds onto daily gains as Wall Street turns red.
- AUD/USD drops for the third consecutive day in a row, corrects further last week peak.
The recovery of AUD/USD from the weekly low it hit during the European session at 0.7084 found resistance around the 0.7130 area. As of writing, it trades at 0.7115, in negative territory for the day, on its way to the lowest close in ten days, amid a stronger US dollar.
The greenback found buyers on the back of risk aversion. The AUD/USD moved off lows amid a recovery in equity prices but during the American session, US stocks turned negative hitting fresh lows and weakened again the pair.
If the slide in equity prices continues, AUD/USD will likely drop to test 0.7100. Below the next support stands at 0.7085 (daily low) followed by 0.7070 and 0.7050. On the upside, the aussie needs to recover 0.7130 to alleviate the bearish pressure. The next resistance stands at 0.7150 followed by 0.7167.
In Wall Street, the Dow Jones is falling by 0.95% and the S&P 500 0.58% but the Nasdaq gains 0.25%. Concerns about Russian-Ukraine tensions weigh on market sentiment. US yields are rising despite the demand for safe-haven assets. The US 10-year bounced from a weekly lot at 1.90% back to 2%. The move helped the dollar secure daily gains.
On Tuesday the economic calendar shows key events. The Reserve Bank of Australia will release the minutes of it latest meeting while in the US the Producer Price Index is due. Attention will also continue on diplomacy.
Technical levels