The AUD/USD currency pair on Friday pulled back sharply in the afternoon session as risk-off trading kicked in amid Russia-Ukraine tensions. The currency pair was trading within a sharply ascending channel formation before the pullback.
The pair has since dropped below the 100-hour moving average line in the 60-min chart. It has also fallen closer to the oversold conditions of the 14-hour RSI.
AUD/USD Fundamentals Overview
From a fundamental perspective, the AUD/USD currency pair is trading at the back of a relatively busy period in the US market. However, the biggest impact on trader decisions seems to be the report that Russia could attack Ukraine anytime, including as early as next week. Guardian cited diplomatic sources who said President Biden called European and NATO leaders from the Situation Room in White House to inform them about the US intelligence report.
From an economic data standpoint, the preliminary Michigan Consumer Sentiment Index for February missed the expectation of 67.5 with 61.7 on Friday. On Thursday, the consumer price index ex-food and energy for January outperformed both the (MoM) and (YoY) expectations. On the other hand, the continuing jobless claims missed estimates while the initial claims for last week were better than expected.
In Australia, consumer inflation expectations for February outperformed 4.5% with 4.6% while Westpac consumer confidence improved to -1.3% up from -2% in the previous period.
AUD/USD Technical Analysis (the 60-min Chart)
Technically, the AUD/USD currency pair seems to have recently pulled back sharply completing a downward breakout from an ascending channel formation. This indicates a significant shift in the market sentiment from strongly bullish to strongly bearish.
Therefore, the bears will be looking to extend the current pullback towards 0.7107 or lower to 0.7081. On the other hand, the bull swill target potential rebounds at about 0.7152, or higher at 0.7180.
AUD/USD Technical Analysis (the Daily Chart)
In the daily chart, the AUD/USD currency pair seems to be trading within a gently descending channel formation. This indicates a slight long-term bearish bias in the market sentiment.
Therefore, the bears will be looking to retain control of the pair by targeting profits at about 0.7055 or lower at 0.6979. On the other hand, the bulls could target long-term profits at about 0.7208, or higher at 0.7288.