The AUD/ USD index climbed after the release of local data. However, it was the continued rise in commodities and domestic yields which seemed to support AUD.
As the reality of Fed taper possibilities sinks in, US yields moved higher. The entire US curve has seen higher yields due to convexity hedging. The 2-year is at an 18-month high, while the 5-year is higher than 1%, the 10-year above 1.5%, and the 30-year above 2%. The US dollar has lost ground to all majors, except JPY or CHF.
Concerns about securities trading led to Robert Kaplan, Dallas Fed President, and Eric Rosengren, Boston Fed President. The majority of commentary suggests that this will not affect any adjustment plans for the US$ 120 million bond buying program.
The supply chain problems facing energy markets are still numerous. Brent crude oil traded above US$ 80/barrel for the first time since 2018. US natural gasoline traded at seven-year highs. According to the UK government, the army is on standby to supply fuel after panic buying caused petrol stations to run out of gas.
For the eighth consecutive day, liquidity was added by the PBOC. APAC equity markets were mixed with Chinese markets, and the rest of Asia down to varying degrees.
Today, the testimony of Jerome Powell, Chairman Federal Reserve and Janet Yellen, Treasury Secretary will be made before Congress.
AUD/USD TECHNICAL ALYSIS
The AUD/USD is heading towards the 21-day simple (SMA), and the 55-day SM. Although there might be resistance, a move above these levels could indicate bullish momentum.
Bullish signals could arise if the 21-day SMA crosses higher than the 55 day SMA.
Support could be found at the lows of 0.72203 or 0.71062. Resistance levels could be found at the previous highs of 0.74782 or 0.76167.