AUD/USD Struggles for Near-Term Direction and Flattens Below the 0.7100 Mark

During the early European session, the AUD/USD pair drew some dip buyers at the mid-0.7000s, but unable to profit on the move. The pair was last seen trading a few pips below the 0.7100 level, almost flat for the day.

In the lack of any shocks in the most recent FOMC meeting minutes, the possibility that the Fed may stop the rate hike cycle later this year weighed on US Treasury bond rates. This, along with a robust equities market rebound, weakened the safe-haven US currency and boosted the risk-averse Australian dollar.

However, the deteriorating global economic picture should temper any optimism. Investors continue to be concerned that a more aggressive effort by major central banks to curb inflation and the Russia-Ukraine conflict might pose threats to the global economy. In turn, this functioned as a tailwind for the dollar and limited the AUD/USD pair.

Since the beginning of this week, spot prices have oscillated within a wider trading range, even from a technical standpoint. The price response appears to indicate that markets have already priced in the Reserve Bank of Australia's hawkish indication that a larger interest rate rise in June remains conceivable. This demands bullish traders' prudence.

Now, market investors await the US data calendar, which includes the publication of Prelim Q1 GDP, Weekly Initial Jobless Claims, and Pending Home Sales. The data might impact USD price dynamics and create momentum for the AUD/USD pair. Traders will continue to seek clues for short-term opportunities from the wider risk mood.

AUD/USD