#AUDUSD @ 0.69925 gains some follow-through traction on Monday and climbs to a fresh five-month high. (Pivot Orderbook analysis)

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• AUD/USD gains some follow-through traction on Monday and climbs to a fresh five-month high.
• Bets for smaller Fed rate hikes, a positive risk tone undermines the USD and offers some support.
• Looming recession fears cap the optimism and act as a headwind for the risk-sensitive Aussie.

The pair currently trades last at 0.69925.

The previous day high was 0.6994 while the previous day low was 0.6915. The daily 38.2% Fib levels comes at 0.6964, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6945, expected to provide support.

The AUD/USD pair kicks off the new week on a positive note and climbs to its highest level since mid-August during the Asian session. The pair, however, trim a part of its intraday gains and retreat below the 0.7000 psychological mark in the last hour.

A combination of factors drags the US Dollar to a fresh seven-month low on Monday, which, in turn, acts as a tailwind for the AUD/USD pair. The US consumer inflation figures released last week showed that the headline CPI fell for the first time in more than 2-1/2 years in December. The data fueled speculations that the Fed may be nearing the end of its rate-hiking cycle and lifted bets for smaller rate hikes in February. This, along with a generally positive tone around the equity markets, continues to weigh on the safe-haven buck and benefits the risk-sensitive Aussie.

The Australian Dollar draws additional support from rising odds for a further interest rate hike by the Reserve Bank of Australia (RBA) in February, bolstered by the upbeat domestic data released last week. In fact, the Australian Bureau of Statistics reported that the headline Consumer Price Index (CPI) re-accelerated to the 7.3% YoY rate – a 32-year-high – in November from the 6.9% in the previous month. Furthermore, Australian Retail Sales surpassed the most optimistic estimates and jumped 1.4% in November, while October’s reading was also revised up to show a 0.4% growth.

Market participants, however, remain worried about the economic headwinds stemming from the COVID-19 outbreak in China. Apart from this, the protracted Russia-Ukraine war has been fueling concerns about a deeper global economic downturn, which keeps a lid on the optimism in the markets. Traders also seem reluctant to place aggressive bullish bets around the AUD/USD pair amid a holiday in the US and ahead of the Chinese economic release, including the Q3 GDP print, on Tuesday.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6987 at the time of writing. Pair opened at 0.6978 and is trading with a change of 0.13 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.6795, 50 SMA 0.6739, 100 SMA @ 0.6635 and 200 SMA @ 0.6831.

The previous day high was 0.6994 while the previous day low was 0.6915. The daily 38.2% Fib levels comes at 0.6964, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6945, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6931, 0.6884, 0.6852
• Pivot resistance is noted at 0.7009, 0.7041, 0.7088

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