#AUDUSD @ 0.67018 scales higher for the second straight day and climbs to a nearly two-week high. (Pivot Orderbook analysis)

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• AUD/USD scales higher for the second straight day and climbs to a nearly two-week high.
• Expectations for a less hawkish Fed weigh heavily on the USD and lend support to the pair.
• Fears of a full-blown global banking crisis and the RBA’s dovish shift could cap the upside.

The pair currently trades last at 0.67018.

The previous day high was 0.6668 while the previous day low was 0.661. The daily 38.2% Fib levels comes at 0.6646, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6633, expected to provide support.

The AUD/USD pair gains strong follow-through traction for the second successive day on Friday and climbs to a nearly two-week high during the first half of the European session. The pair currently trades just above the 0.6700 round-figure mark and is drawing support from a combination of factors.

Multi-billion-dollar lifelines for troubled banks in the US and Europe ease fears about widespread contagion, which, in turn, boosts investors’ confidence. This is evident from a modest recovery in the equity markets, which undermines the safe-haven US Dollar and benefits the risk-sensitive Aussie. Apart from this, expectations that the Federal Reserve will adopt a less hawkish stance in the wake of worsening economic conditions weigh on the buck and provide a goodish lift to the AUD/USD pair.

Last week’s collapse of two mid-size US banks – Silicon Valley Bank and Signature Bank – forced investors to scale back their bets for more aggressive interest rate hikes by the Fed. In fact, the markets are now pricing in a nearly 90% chance of a smaller 25 bps lift-off at the upcoming FOMC meeting on March 21-22. This leads to a modest downtick in the US Treasury bond yields, which is seen as another factor dragging the USD lower and contributing to the strong bid tone surrounding the AUD/USD pair.

Investors, however, remain worried about the possibility of a full-blown global banking crisis. This, along with looming recession risks, should keep a lid on any optimism in the markets and cap the upside for the AUD/USD pair. Furthermore, the Reserve Bank of Australia’s (RBA) recent dovish shift, signalling that it might be nearing the end of its rate-hiking cycle, warrants some caution for aggressive bullish traders and before positioning for any meaningful near-term appreciating move for the major.

Nevertheless, the AUD/USD pair remains on track to end the week on a positive note and reverse a major part of last week’s losses to its lowest level since November 2022. Market participants now look to the release of the Michigan US Consumer Sentiment Index for short-term opportunities later during the early North American session on Friday. The focus, however, will remain on the outcome of the highly-anticipated FOMC policy meeting, scheduled to be announced next Wednesday.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6706 at the time of writing. Pair opened at 0.6656 and is trading with a change of 0.75 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6721, 50 SMA 0.6875, 100 SMA @ 0.6775 and 200 SMA @ 0.6767.

The previous day high was 0.6668 while the previous day low was 0.661. The daily 38.2% Fib levels comes at 0.6646, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6633, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6621, 0.6587, 0.6563
• Pivot resistance is noted at 0.6679, 0.6703, 0.6737

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