AUD/USD stalls at 0.7400 after a three-day rally from 0.7165

• Australian dollar's recovery from 0.7160 lows loses steam at 0.7400.
• The Aussie remains moderately positive in a mixed market mood. 
• AUD/USD above 0.7400, year-to-date highs lie at 0.7440.

The Australian dollar seems unable to confirm above 0.7400 on Friday, although it remains moderately positive on the day, with downside attempts supported above  0.7380.

Aussie’s recovery losses steam as risk appetite falters

The pair remains 1.5% up on weekly charts after having retraced the previous week’s decline, yet the bullish momentum observed in the previous two days seems to have faded.

Market sentiment has deteriorated somewhat. The lack of substantial progress on the peace talks between Moscow and Kyiv while Russian artillery continues shelling Ukrainian cities is starting to weigh on market sentiment. Beyond that, investors seem to have taken a cautious stance awaiting the outcome of the US-China conference over Russia.

European stock markets are trading right below opening levels, with the German DAX Index and the French CAC both about 0.4% down. The US. Markets are mixed, with the S&P 500 and the Nasdaq Tech Index about 0.7% up and the Dow Jones down by 0.2% minutes after the opening bell.

The Aussie appreciated sharply earlier this week, buoyed by strong employment data in Australia, which boosted market hopes that the RBA might consider accelerating its monetary normalization plans and was supported further by the Chinese Government's pledge to roll out a new economic stimulus. 

AUD/USD consolidating right below 0.7400

The pair is now consolidating gains above 0.7380 following a 3% rally over the last three days. On the upside, immediate resistance lies at 0.7400 area (Intraday highs) which is defending 0.7440 (March 7 high). A successful break of that level would clear the path towards October 2021 highs at 0.7555.

On the downside, now 0.7380 previous resistance (March 10, 11 highs) is working as immediate support. The next bearish targets below here would be the 200-day SMA, now around 0.7300, and 0.7240 (March 8 low).

Technical levels to watch