AUD/USD appreciates, approaching 0.7175 in the early hours of Monday’s Asian session. Treasury buyback concerns exert pressure on the US Dollar. An Iranian official characterised the prospect of renewed US economic sanctions as ‘desperate.’ The AUD/USD pair is experiencing slight upward movement, trading at approximately 0.7175 in the early hours of the Asian session on Monday. The US Dollar edges lower against the Australian Dollar amid concerns over the US Treasury’s plan to expand buybacks of longer-dated government debt. The Reserve Bank of Australia Meeting Minutes are scheduled for release later on Tuesday. US Treasury Secretary Scott Bessent stated on Thursday that the Treasury might raise bond buybacks beyond $4 billion, in part to indicate that current yields do not align with the underlying economic fundamentals.
This development followed the department’s unexpected announcement to at least double the scale of its buybacks of longer-dated debt, aiming to control bond yields. “Bessent’s efforts to suppress U.S. yields haven’t done much for U.S. yields, but it’s undermined the dollar,” said Marc Chandler. “The market is pushing back,” Chandler added. However, rising tensions in the Middle East could enhance safe-haven flows, thereby mitigating the USD’s losses. Iran’s Foreign Minister Abbas Araghchi characterised the anticipated new US sanctions as a manifestation of desperation on Sunday, asserting that these measures would ultimately be ineffective in undermining Tehran. Meanwhile, Iran’s Security Chief Mohsen Rezaei issued a warning of “earthquake-like” retaliation should US President Donald Trump pursue any additional actions.
DBS highlights that Australia’s most recent labour market report presented an unexpected downturn, revealing “15.8k job losses in Jul, in contrast to analysts’ expectations for a 12k jobs increase.” The bank underscores this unforeseen decline in employment as a further element that will influence market analysis of forthcoming Australian data, including the July CPI release and its ramifications for RBA anticipations. In the daily chart, AUD/USD continues its ascent above the 20-period Bollinger middle band and the 100-day moving average, which now support a bullish near-term outlook. Price is approaching the upper Bollinger band, indicating a stretched move, while the Relative Strength Index (14) around 70.0 points to overbought conditions that may hinder additional upside, despite the overall constructive tone.
On the downside, initial support is identified at the 100-day moving average near 0.7072, which is further reinforced by the 20-period Bollinger middle band situated just below at 0.7065. A more substantial support level is found at the lower Bollinger band around 0.6955. On the topside, immediate resistance is defined by the upper Bollinger band at 0.7175. A sustained break above this barrier would open the door to further gains, while failure to clear it may trigger a corrective pullback toward the mentioned support zone.
