- The AUD/USD pair continues lower for the third day in a row and hits a new multi-week low.
- Aggressively due to Fed expectations, risk appetite lifts the dollar and weighs on the risk-sensitive Australian dollar.
- The technical situation favors the bears and supports the prospects of a further decline in the near term.
The pair AUD/USD remains under strong selling pressure for the third day in a row and falls to its lowest level since January 6 ahead of the North American session on Friday. The pair currently sits around the 0.6825 zone, down more than 0.70% on the day, and looks vulnerable to further decline.
The US dollar hit a fresh six-week high amid expectations that the Federal Reserve will continue to raise interest rates and it turns out to be a key factor weighing on the AUD/USD pair. Beyond this, the prevailing risk-off environment further benefits the relative safe-haven status of the USD and helps steer flows away from the risk-sensitive Aussie.
From a technical standpoint, the overnight break below the 50-day SMA for the first time since November 2022 was seen as a new trigger for bears. Furthermore, the daily chart oscillators have just entered negative territory and support the prospects for an extension of the recent sharp pullback from the highest level since June 2022.
The pair looks set to weaken further below 0.6800 and accelerate the decline towards the next relevant support near the 0.6740-0.6735 region. This is followed by the 100-day SMA, currently around the 0.6715-0.6710 zone, which if broken decisively would set the stage for further short-term depreciation in AUD/USD.
On the other hand, the breakout of the 50-day SMA support, currently just before 0.6900, seems to act as a strong immediate hurdle. The AUD/USD pair could move towards the horizontal resistance of 0.6945-0.6950, above which a further move higher from short positions would allow the bulls to conquer the 0.7000 level.
AUD/USD daily chart
Key levels to watch
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.
