#AUDUSD @ 0.65000 pares the biggest daily gains in three weeks, fades bounce off yearly low. (Pivot Orderbook analysis)

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• AUD/USD pares the biggest daily gains in three weeks, fades bounce off yearly low.
• Market sentiment sours again amid looming energy crisis in Europe, concerns over China’s economic health.
• Hawkish Fedspeak, rebound in yields add strength to the risk-off mood.
• Australia’s first event monthly inflation data for July and August will be important considering RBA’s cautious mood.

The pair currently trades last at 0.65000.

The previous day high was 0.6531 while the previous day low was 0.6363. The daily 38.2% Fib levels comes at 0.6467, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6427, expected to provide support.

AUD/USD consolidates the previous day’s rebound from the two-year low around 0.6500 during Thursday’s Asian session. In doing so, the Aussie pair pares the biggest daily jump in three weeks amid the cautious mood ahead of the key data from Australia and the US.

The risk-barometer pair rallied during the late Wednesday, after refreshing the yearly low, as the US dollar tracked a heavy slump in the Treasury yields to retreat from the two-decade top.

That said, the US Dollar Index (DXY) reversed from 114.78 to 113.00 after the Bank of England (BOE) announced surprise bond buying to restore the market’s confidence following the disappointment from the UK’s fiscal plan.

That said, the Bank of England (BOE) announced a bond-buying program to defend the British Pound (GBP) on Wednesday. The details suggest that the BOE will buy bonds with a maturity of over 20 years and up to 5 billion sterling worth per auction initially.

On the other hand, the US international trade deficit narrowed by $2.9 billion to $87.3 billion in August from $90.2 billion in July. Details suggest that the Exports dropped for the first time since January while Imports marked the fifth consecutive monthly decline. Further, Atlanta Fed President Raphael Bostic said on Wednesday that the baseline scenario right now includes a 75 basis points (bps) rate hike in November and a 50 bps increase in December, as reported by Reuters. Additionally, Chicago Federal Reserve President Charles Evans also emphasized the need to address inflation and tried to renew the US dollar buying but could not due to the softer yields.

Amid these plays, the US 10-year Treasury bond yields slumped the most in six months and allowed equities to consolidate recent losses, which in turn dragged the US Dollar Index (DXY) from the multi-year high. It’s worth noting that the S&P 500 Futures print mild losses and fades bounce off 21-month low of late.

While the risk-on mood favored the AUD/USD buyers the previous day, the prevailing energy crisis in Europe, doubts over the BOE’s capacity to regain traders’ confidence and current pessimism in China weigh on the pair.

Although 78.6% Fibonacci Expansion (FE) of the AUD/USD pair’s April-August moves, around 0.6355 triggered the pair’s bounce, a clear upside break of the two-week-old resistance line, near 0.6530 at the latest, becomes necessary to defend the recovery.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6503 at the time of writing. Pair opened at 0.6523 and is trading with a change of -0.31 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6696, 50 SMA 0.6853, 100 SMA @ 0.6913 and 200 SMA @ 0.7084.

The previous day high was 0.6531 while the previous day low was 0.6363. The daily 38.2% Fib levels comes at 0.6467, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6427, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6414, 0.6305, 0.6246
• Pivot resistance is noted at 0.6581, 0.664, 0.6749

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