#AUDUSD @ 0.68838 builds on last week’s late bounce and gains traction for the second straight day. (Pivot Orderbook analysis)

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• AUD/USD builds on last week’s late bounce and gains traction for the second straight day.
• Retreating US bond yields, a positive risk tone undermines the USD and extends support.
• Recession fears might cap the risk-sensitive aussie ahead of the US CPI report on Tuesday.

The pair currently trades last at 0.68838.

The previous day high was 0.6877 while the previous day low was 0.6745. The daily 38.2% Fib levels comes at 0.6827, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6795, expected to provide support.

The AUD/USD pair catches some bids for the successive straight day on Monday and builds on last week’s bounce from sub-0.6700 levels or the lowest since July 14. This also marks the third day of a positive move in the previous four and lifts spot prices to a more than one-week high, closer to the 0.6900 mark during the mid-European session.

A combination of factors force the US dollar to prolong its recent sharp pullback from a two-decade high, which, in turn, is seen lending support to the AUD/USD pair. The markets already seem to have priced in a supersized 75 bps rate hike by the Federal Reserve at the next policy meeting on September 20-21. Furthermore, a modest downtick in the US Treasury bond yields seems to weigh on the greenback.

Apart from this, a generally positive tone around the equity markets further undermines the safe-haven buck and benefits the risk-sensitive aussie. That said, growing recession fears, amid the prospects for a faster policy tightening by major central banks and economic headwinds stemming from fresh COVID-19 curbs in China could cap optimism. This, in turn, warrants some caution for bullish traders.

Investors might also refrain from placing aggressive bets and prefer to move to the sidelines ahead of the latest US consumer inflation figures, due for release on Tuesday. The crucial US CPI report for August will play a key role in influencing the Fed’s policy outlook. This will drive the USD demand in the near term and help determine the next leg of a directional move for the AUD/USD pair.

In the meantime, spot prices are more likely to consolidate in a range amid absent relevant market-moving economic releases from the US on Monday. That said, the US bond yields, along with the broader risk sentiment, might provide some impetus to the greenback and allow traders to grab short-term opportunities around the AUD/USD pair.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6878 at the time of writing. Pair opened at 0.6844 and is trading with a change of 0.5 % .

The pair is trading above its 20 Daily moving average @ 0.6874, below its 50 Daily moving average @ 0.6896 , below its 100 Daily moving average @ 0.6969 and below its 200 Daily moving average @ 0.7116

The previous day high was 0.6877 while the previous day low was 0.6745. The daily 38.2% Fib levels comes at 0.6827, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6795, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6766, 0.669, 0.6634
• Pivot resistance is noted at 0.6899, 0.6954, 0.7031

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