Jakarta, GIC Trade – The Australian dollar currency in Friday's trading received new buying offers driven by various factors. Upbeat Chinese data benefited the Aussie amid some USD sell-offs. While recession fears are looming, expectations of a hawkish Fed will limit the USD decline and limit major currencies.
 
The decline in US Treasury bond yields turned out to be the main factor that put downward pressure on the US dollar. In addition, upbeat Chinese macro data fueled optimism about a strong recovery in the world's second-largest economy, further undermining the greenback's safe-haven status and providing additional boost to the Australian Dollar's Chinese proxies. 
 
Nonetheless, a combination of factors may hold back the bullish trend from placing aggressive bets around the AUD/USD pair and limiting further gains, at least for now.
 
Meanwhile, strengthening expectations that the Federal Reserve will maintain its hawkish stance for longer after very high inflation will act as a drag for US bond yields and provide support to the USD.
 
Positive sentiment was lifted by hawkish comments by many influential FOMC members, emphasizing the need for higher rate hikes to fully bring inflation under control.
 
This has pushed the yield on 10-year U.S. government bonds to its highest level since last November and the rate-sensitive two-year bond to levels last seen in July 2007 on Thursday.
 
In addition, concerns about economic headwinds stemming from the rapid rise in borrowing costs continue to weigh on investor sentiment. This is evident from the prevailing cautious mood around the equity markets, which will further help limit the greenback's decline and contribute to limiting the rise of the AUD/USD pair. 
 
Market participants may also refrain from taking aggressive positions ahead of the Reserve Bank of Australia's (RBA) monetary policy meeting next week. Meanwhile, market participants on Friday will be watching the release of US services sector ISM data.
 
Fundamentally, upbeat data from China has boosted the Aussie upward movement. Then how technically, see the following analysis:
 
Technical Analysis

 
AUD/USD on the 1-hour period moved upwards trying to touch the resistance area of 0.67825 to turn its bias bullish towards the next resistance level at 0.68340. As for further bearishness, AUD/USD needs to cross the support area at 0.67180 towards the next support level at 0.66810.

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