November 10, 2022 01:06 AM ET
By:AnalysisWatch
The AUDUSD is underperforming other risk currencies following Tokyo's release of higher than expected consumer inflation expectations. The asset is hovering around the 0.6400 round-level support in the early hours of the European session and has diverged to a negative correlation with US Treasury yields.
At press time, 10-year US Treasury yields are steadily approaching the day's low of 4.07%.Meanwhile, the US dollar index (DXY) has refreshed its low of the day at 110.17 amid a recovery in positive market sentiment.
On an hourly scale, the asset has experienced a sharp decline after failing to hold above the horizontal resistance placed on October 27 at 0.6522. The stock is hovering around the 200-period Exponential Moving Average (EMA) at 0.6427. This could be a breakout move, as a settlement below the powerful 200 EMA would trigger a bearish reversal.
Meanwhile, the Relative Strength Index (RSI) (14) has moved into the bearish 20.00–40.00 range, indicating that bearish momentum is active.
Greenback bulls will remain in a dominant position if the asset falls below Monday's low of 0.6406, which will drag the asset towards the October 31 low of 0.6368. A slide below the latter will explode the asset and show further declines to near the November 3 low of 0.6272.
On the other hand, a break above Tuesday's high at 0.6551 will take the asset towards the round-level resistance at 0.6600, followed by the September 21 high around 0.6700.
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