Aussie Loses Steam, Risks The AUD/USD Pair Dropping Below 0.7400
The Australian Dollar has been one of the best-performing currencies this week, but it is showing signs of fatigue and could retrace some of its wins against the greenback.
The Aussie Is Showing Signs Of Fatigue
The AUD/USD pair has been excellent to watch this week, with the Aussie outperforming the greenback across numerous trading sessions. The Australian Dollar was performing well this week thanks to some positive economic data from the Land Down Under.
However, most of the Aussie’s wins was due to the US Dollar grossly underperforming this week. Last week’s poor NFP data haunted the greenback for most of this week, with the US Treasury Yield recording losses over the past few days.
The US Treasury yields declining in recent days helped the AUD/USD pair to surge higher over the past few days. However, the Aussie seems to be showing some signs of fatigue and allowing the greenback to recover.
At the time of writing, the AUD/USD pair is down by 0.002% and trading around the 0.7412 level.
AUD/USD Could Drop Below 0.7400
The AUD/USD pair could drop below the 0.7400 level if the Aussie continues to underperform against the US Dollar. The greenback has regained some of its strength, thanks to the boost it received from the 10-year Treasury yield.
Rebounding US bond yields played a huge role in limiting the greenback’s losses capped gains for the AUD/USD pair. If the greenback continues to recover, then it could attempt to return the pair to its Monday level of 0.7310 over the coming days. At the moment, it would be tough for the AUD/USD pair to drop to the Monday level as the greenback hasn’t garnered enough strength to embark on a full recovery.
However, if the Aussie regains control of the market, then the AUD/USD pair could surge higher and seek to move towards the 0.7450 level over the next few sessions.