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USD Bolstered Amid Risk Selloff, AUDUSD Extends Yearly Lows

  • Treasury yields extended their decline on Friday as new data on US manufacturing added weight to mounting recessionary concerns across global markets. The risk-off tone was dollar supportive, with all major currencies losing ground apart from the Japanese Yen.
  • AUD/USD has fallen to fresh YTD lows, dipping below the 0.6800, before stabilising somewhat. From a technical standpoint, the next level to watch will be 0.6805, the June 22, 2020 low. Below that is the June 15th low of 0.6777.
  • Additionally, AUD/JPY is off by over 2%, through the 50-day MA, last tracking close to 91.80, having made a low print of 91.42.
  • The Euro had remained fairly subdued throughout European hours as Eurozone CPI data came in just ahead of expectations at 8.6% Y/Y. However core inflation came in below forecast at 3.7% - making for a broadly market-neutral release.
  • A significant dampening of market sentiment then prompted a fresh wave of selling for EURUSD, which printed below yesterday’s lows of 1.0383. This narrows the gap once again with the 1.0350, May 13 low and a bear trigger. Furthermore the 1.0341 low from 2017 loiters just below this key support. For bulls, a breach of 1.0600 would alter the picture and highlight a bullish channel breakout.
  • Swiss CPI and the Bank of Canada’s Business Outlook Survey highlight Monday’s calendar, however it is worth noting the US will be out for July 4th holiday.

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