AUD/USD prints an eight-week low around 0.7207 amid US dollar strength

• AUD/USD edges lower as risk-sensitive currencies get hammered by the greenback.
• Fed’s Bostic adds to the group of Fed members that would like a faster pace of the bond taper.
• AUD/USD is headed towards 0.7169, though a break lower would expose 0.7105.

The AUD/USD grinds lower to an eight-week low during the New York session, barely down 0.04%, trading at 0.7219, at press time. The market sentiment is downbeat, as portrayed by US equity indices down. In the FX market, risk-sensitive currencies, like the Australian and the New Zealand dollar and the British pound, fall against the buck. Safe-haven currencies are also down, except for the US Dollar, as it seems that market participants were waiting for the renomination of current Federal Reserve Chairman Jerome Powell for another term.

In the overnight session, the AUD/USD remained subdued In a 0.7210-38 range, as investors kept bidding the greenback on the Powell propelled rally. Nevertheless, it reached a new eight-week low at 0.7207, bouncing off those levels towards the Monday low at 0.7220.

Fed speakers more vocal about a faster bond taper

On Monday, Fed Bank of Atlanta President Raphael Bostic said that the Fed might need to speed up the removal of monetary stimulus and allow for an earlier than expected increase in interest rates. That is in the tune of what Fed Governor Christopher Waller, and Vice-Chairman Richard Clarida, expressed each.

On the macroeconomic front, the US economic docket featured the IHS Markit PMI’s for November. Manufacturing PMI heightened to 59.1, better than the 59 expected. The Services Index rose but lower than the 59.1 foreseen, to 57. Moreover, the Richmond Fed Manufacturing Index for November increased to 11, better than the five expected.

AUD/USD Price Forecast: Technical outlook

The Australian dollar keeps extending its losses. On Monday, the pair broke below an upslope support trendline that accelerated the downtrend. The daily moving averages (DMA’s) are above the spot price. The Relative Strength Index (RSI) is at 32, edges lower, indicating that USD bulls could push the pair further down before reaching oversold conditions.

On the way down, the first support would be the September 30 low at 0.7169. A breach of the latter would expose the August 20 low at 0.7105.

On the flip side, the first resistance would be the upslope trendline around the 0.7240s region. A break would expose crucial levels, with the November 18 high at 0.7292, followed by the November 15 high at 0.7370.