The AUD/USD pair remains in a positive position near 0.6420 amidst the US Dollar’s decline.

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• AUD/USD holds positive ground around 0.6420 amid the weakening US Dollar.

The pair currently trades last at 0.64204.

The previous day high was 0.6421 while the previous day low was 0.6387. The daily 38.2% Fib levels comes at 0.6408, expected to provide support. Similarly, the daily 61.8% fib level is at 0.64, expected to provide support.

The AUD/USD pair gains momentum for the second consecutive day. The pair edges higher to the 0.6420 mark in the Asian session on Tuesday. The Greenback faces some follow-through selling after S&P Global downgraded and revised its outlook for multiple US banks on Monday, following a similar action by Moody’s.

The weakening of the US Dollar has boosted AUD/USD. On Monday, S&P Global downgraded multiple US banks, indicating a rapid increase in interest rates is putting a strain on the financing and liquidity of many US institutions. However, market participants are increasing their bets on additional rate rises by the Federal Reserve (Fed), which drive US 10-year Treasury bond yields to 4.366%, the highest level of 2007.

On the other hand, the People’s Bank of China (PBoC) slashed its Loan Prime Rate (LPR) for one year by a smaller margin than anticipated. Chinese central bank decided to cut the one-year Loan Prime Rate (LPR) by 10 basis points (bps) to 3.45% from 3.55% and maintained the five-year LPR unchanged at 4.2%. Investors will keep an eye on the headline surrounding China’s economic woes as it might impact the Aussie, a proxy for China’s economic prospects.

Looking ahead, market players await S&P Global PMI from both Australia and the US due on Wednesday. Later in the week, the US Existing Home Sales, Initial Jobless Claims, and Durable Good Orders will be released. Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday will be in the spotlight this week. Traders will take cues from the data and find opportunities around the AUD/USD pair.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6422 at the time of writing. Pair opened at 0.6414 and is trading with a change of 0.12 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6557, 50 SMA 0.6669, 100 SMA @ 0.6665 and 200 SMA @ 0.6733.

The previous day high was 0.6421 while the previous day low was 0.6387. The daily 38.2% Fib levels comes at 0.6408, expected to provide support. Similarly, the daily 61.8% fib level is at 0.64, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6394, 0.6373, 0.636
• Pivot resistance is noted at 0.6428, 0.6442, 0.6462

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