#AUDUSD @ 0.66890 holds lower ground near two-year bottom marked the last week. (Pivot Orderbook analysis)

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• AUD/USD holds lower ground near two-year bottom marked the last week.
• RBA Minutes joined mixed US housing data, chatters over Fed’s 1.0% rate hike to underpin US dollar strength.
• Geopolitical fears surrounding China, Europe adds strength to risk-off mood.
• Australia’s Westpac Leading Index, RBA’s Bullock can be eyed for immediate directions ahead of Fed.

The pair currently trades last at 0.66890.

The previous day high was 0.6734 while the previous day low was 0.6672. The daily 38.2% Fib levels comes at 0.671, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6696, expected to provide resistance.

AUD/USD justifies its risk-barometer status while gradually approaching the yearly low marked on Friday, retreating to 0.6690 during Wednesday’s Asian session. The market’s risk aversion could be attributed to the pre-Fed anxiety and geopolitical fears surrounding China and Europe. Also adding to the Aussie pair’s weakness were the downbeat statements from the Reserve Bank of Australia’s (RBA) latest Monetary Policy Meeting Minutes.

RBA Minutes showed that the policymakers are well prepared for further rate hikes to tame inflation. However, the statements like, “Interest rates have increased quite quickly and were getting closer to normal settings,” seem to weigh on AUD/USD prices of late.

Elsewhere, chatters that the US Federal Reserve (Fed) may surprise markets by a 1.0% rate hike, per the latest talks from global economist Nouriel Roubini, also weigh on the risk-off mood.

It should be noted that the nine-month downtrend in the US NAHB Housing Market Index precedes the Building Permits to 1.517M in August versus 1.61M forecast and 1.685M prior. However, Housing Starts improved to 1.575M compared to 1.445M market consensus and 1.404M previous readings.

Amid these plays, US 10-year Treasury yields rose to the highest level since February 2011, around 3.567% by the press time, whereas Wall Street closed in the red.

Moving on, RBA’s Bullock may offer an intermediate rebound of the AUD/USD pair but the overall bearish trend is likely to persist unless Fed surprises the markets, which is less likely.

Also read: Federal Reserve Preview: Forecasting 5% interest rates? Dollar to move on dot-plot, Powell’s pledges

A sustained trading below the 10-DMA resistance, around 0.6750 by the press time, directs AUD/USD bears towards a one-month-old descending support line, close to 0.6470 at the latest.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6689 at the time of writing. Pair opened at 0.6726 and is trading with a change of -0.55% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6818, 50 SMA 0.6888, 100 SMA @ 0.6948 and 200 SMA @ 0.7105.

The previous day high was 0.6734 while the previous day low was 0.6672. The daily 38.2% Fib levels comes at 0.671, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6696, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.6687, 0.6649, 0.6625
• Pivot resistance is noted at 0.6749, 0.6773, 0.6811

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