AUD/USD fell significantly yesterday up to the Asian session today to a new low at 0.74720. The bulls were forced to take profits after pushing the price so high earlier this week to a new high at 0.76595. The decision to sell off comes in as the Australian Trade data released by the Australian Bureau of Statistics yesterday discounted the Aussie currency as imports were far higher than expected. The report, therefore, failed to give the bulls any strong reasons to push higher. AUD has lost over 0.87% of its value following this report.
Furthermore, the expected strong yields on the US dollar following the hawkish Fed minutes pushed investors to take profits. The focus seems to have been shifted to the US data. The Fed minutes had revealed plans for the balance sheet reduction by more than $1 trillion a year while raising the rates alongside.
Nonetheless, the increasing tensions between Russia and Ukraine and war-crimes allegations placed on Russia further chase investors away from higher-yielding assets such as the Aussie and leads investors to seek safety in the US dollar.
The Australian dollar is generally bearish, and the fall might last longer this week, given the heightened concerns about the interest rate hikes for the dollar. The next strong support for AUD/USD is at 0.73640. We expect the bulls to come back possibly in this region; otherwise, a further loss might follow for the currency pair this week.