FxWirePro: AUD/USD fails to extend previous session recovery, U.S. dollar strength amid dwindling risk sentiment keeps downside pressure

AUD/USD chart - Trading View 

AUD/USD failed to extend previous session recovery from monthly lows, trades 0.47% lower at 0.7639 at around 04:30 GMT.

Aussie remains on the back foot despite upbeat Producer Price Index (PPI) data. Risk-off markets amid US-China tensions and discouraging Novavax vaccine news weigh.

Australian PPI grew to 0.5% QoQ in Q4, beating -0.1% forecast and 0.4% previous readings. Further details suggest the yearly figures also recovered from -0.7% market expectations to -0.1%.

Novavax unveiled 89.3% efficacy of its covid vaccine during the phase 3 trials. Additionally, US stimulus gridlock, recession fears and US-China tussle dent market sentiment.

Price action is extending break below 21-EMA support. Oscillators have turned bearish and 'Bearish Divergence' on the daily charts raises downside pressure.

The pair is on track to test 55-EMA support at 0.7564. Break below will drag the pair lower ro test 38.2% Fib retracement at 0.7503.

On the flipside, the pair finds strong resistance at 0.7685. Retrace above will negate bearish bias.