AUD/USD hammered as Aus bond yields keep declining

AUD/USD has come under severe selling pressure in the last minutes, with the exchange rate touching a new session low of 0.7470 after a topside failure above the 0.75 handle, where spec offers were reported as a potential Aug RBA rate cut continues to be priced in. It is worth noting that Australian 3 year bond futures trades at record low yield of 1.39 % v cash rate of 1.75%, while the Australian 10-year bond yield is down towards 1.88% vs 1.98% yesterday.

AUD/USD technical in-house view

Valeria Bednarik, Chief Analyst at FXStreet, provides her technical view, noting: "In the 4 hours chart, the price recovered above its 200 EMA, but it's at risk of resuming its slide, as the price was contained by a sharply bearish 20 SMA, while the technical indicators have recovered within positive territory, but lost upward strength, suggesting the pair may retest the critical support at 0.7450 this Friday."

Omkar Godbole, News Editor and Analyst at FXStreet, also shared his take: " A bullish break from an inverse head and shoulder would signal a short-term bottom is in place at 0.7453." However, since pressure is currentlly back lower, Omkar adds that "on the lower side, a day end closing below the rising trend line support seen today at 0.7466 would suggest the extension of the bearish move from last Friday’s high of 0.7676."