#AUDUSD @ 0.62697 takes offers to reverse the previous day’s bounce off yearly low. (Pivot Orderbook analysis)

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• AUD/USD takes offers to reverse the previous day’s bounce off yearly low.
• Firmer yields, risk aversion exert downside pressure during pre-data anxiety.
• Grim headlines from China, hawkish Fedspeak and downbeat Aussie data please sellers.
• US inflation numbers may add strength to the bearish bias unless missing forecasts with wide margins.

The pair currently trades last at 0.62697.

The previous day high was 0.6299 while the previous day low was 0.6235. The daily 38.2% Fib levels comes at 0.6275, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.626, expected to provide support.

AUD/USD remains depressed around 0.6270, mildly offered of late, as European traders brace for Thursday’s inflation data. In doing so, the Aussie pair portrays the market’s cautious mood while also ignoring the bullish candlestick formation at the multi-month low marked the previous day.

Talking about the negatives, fresh lockdowns in Shanghai and Hong Kong’s determination to keep the covid-linked entry barrier intact weigh on the AUD/USD prices due to Australia’s trade ties with China. On the same line are fears of an energy crisis in the Eurozone due to the latest gas pipeline leak from Russia to Germany.

A pause in the heading Treasury yields, after a two-day downtrend, also seems to underpin the AUD/USD weakness, via the US dollar strength. Additionally, downbeat prints of Australia’s Consumer Inflation Expectations for October, to 5.4% from 5.8% prior, also offer extra negative for the Aussie pair. US restrictions on doing business with Chinese chipmakers and fears of economic slowdown in Beijing also lure the bears of late.

It should be noted that the recently softer US inflation expectations and a retreat in the hawkish Fed bets seem to challenge the pair sellers. Further, talks that China’s state authorities are buying houses as a part of the stimulus also should have put a floor under the AUD/USD pair.

Above all, the market’s cautious mood before the US Consumer Price Index (CPI) seems to help the AUD/USD pair in grinding lower. That said, forecasts suggest that the headline US CPI is expected to ease to 8.1% YoY versus 8.3% prior. However, the more important CPI ex Food & Energy is likely to increase to 6.5% YoY from 6.3% prior and can favor more downside of the AUD/USD pair.

Although Wednesday’s Doji near the 31-month low joins the oversold RSI (14) to challenge AUD/USD bears, a five-week-old bearish trend channel keeps the sellers hopeful. With this, the Aussie pair is gradually rushing towards the March 2020 low surrounding 0.6215.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6272 at the time of writing. Pair opened at 0.6277 and is trading with a change of -0.08% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6504, 50 SMA 0.6741, 100 SMA @ 0.6852 and 200 SMA @ 0.7042.

The previous day high was 0.6299 while the previous day low was 0.6235. The daily 38.2% Fib levels comes at 0.6275, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.626, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6242, 0.6207, 0.6178
• Pivot resistance is noted at 0.6305, 0.6334, 0.6369

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