- AUD/USD encounters fresh bid on Friday and falls back near the weekly low.
- Weak Chinese trade data weakens the Australian Dollar amid strong USD buying.
- The technical setup favors the bears and supports the prospects for further losses.
The AUD/USD pair comes under new selling pressure on Friday and extends its intraday decline until the start of the European session. Prices hit a new daily low following the release of weaker Chinese trade data, although they manage to stay above the psychological mark of 0.6500 and bounce a few pips in the last hour.
However, a significant recovery appears difficult due to strong purchases of the US dollar (USD), reinforced by expectations that the Federal Reserve (Fed) will keep interest rates higher for longer amid the persistent American inflation. Aside from this, lingering geopolitical tensions stemming from conflicts in the Middle East benefit the safe-haven Australian Dollar and could further contribute to limiting the AUD's risk sensitivity.
From a technical point of view, AUD/USD has managed to defend the 0.6500 mark, which should now act as a key point. Since the oscillators on the daily chart have just started to gain negative traction, a convincing break below will be seen as a new trigger for the bears and will set the stage for an extension of the recent sharp pullback from the 0.6645 zone, high of a month touched on earlier this week.
The continuation of selling below the 0.6480 area, the monthly low, will reaffirm the negative bias and allow the AUD/USD pair to once again challenge the annual low, around the 0.6445-0.6440 area touched in February. The bearish trajectory could further extend towards the 0.6400 mark en route to the next relevant support near the 0.6355-0.6350 area.
On the other hand, any recovery attempt will face strong resistance near the 0.6545-0.6555 area, which coincides with the important 200-day SMA. This is followed by the 100-day SMA, currently near the 0.6600 mark, above which a short move could lift the AUD/USD pair back towards the 0.6640-0.6645 zone. , or monthly maximum.
AUD/USD daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
