AUD/USD Price Aiming For 0.7350, Bears Benefiting From Delta Strain

The AUD/USD price wrapped up the week in the negative zone, falling below the 0.74 key support as the investors ran off to spread the Delta variant of coronavirus.

Coronavirus has been significant when it comes to the risk sentiment. The financial and commodities market have plummeted recently amid the worse risk mode of the market. This has ultimately affected the Australian Dollar as well.

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The AUD/USD pair has been going through a streak of losses for the third consecutive trading day on Monday. The downside stream is stemming from the spread of the Delta variant across the globe. In addition, the UK and Australia saw a huge increase in a case recently, and Victoria announced the extension of the existing lockdown. This has affected the Aussie as it is a high-yielding risk asset.

Investors have flown to the US Dollar as a safe-haven asset that added more fuel to the burning bearish trend. Meanwhile, the round of solid US data and change given rate hikes after the Fed announced that it could raise the rates in 2023 sooner than expected has given strong support to the Greenback.

The DXY index is also surging higher, just under 93.00. The index posted 0.6% gains for the week, and bulls are looking promising.

Even though Jerome Powell reiterated more accommodative policy for the economy, calling inflation temporary, the Greenback remains resilient and supported.

Since there is no major data event on the economic calendar, we can expect the risk sentiment to lead the markets this week. However, we also expect a dovish tone from RBA that may help the bears further.

AUD/USD price technical analysis: Any room left for bulls?

The recent downtrend is attributed to the technical setup on the daily chart as well. We can clearly see a breach of descending trendline support at 0.7380.

(Click on image to enlarge)

GBP/USD price on daily chart

GBP/USD price on daily chart

However, we can expect a mild rally towards the 0.7410 area, which is the broken demand zone. Any retest of the zone will be considered a selling opportunity provided the volume decreases for the up wave.

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