- The US dollar jumps on the forex board with the Wall Street crash.
- AUD / USD drops to 0.7680 before bouncing, remains under pressure.
He AUD/USD accelerated the decline during the US session and fell to 0.7680, reaching the lowest level since Tuesday. At time of writing, the pair is trading above 0.7700, still under pressure.
The drop took place amid a rally in the US dollar across the board. He Australian dollar and kiwi are among the hardest hit by a sharp drop in the stock markets around the world.
He DXY rose to 90.75, the strongest level since December 22. A drop in US bond yields limited the rise. Still, the momentum favors the dollar. The weaker-than-expected US economic data did not affect the dollar.
In Wall Street, the Dow Jones falls 0.75%, to its lowest level since January 6. The Nasdaq falls 0.70%. After Powell’s speech from the Fed and Biden’s stimulus package, investors now seem to focus on other things that aren’t looking so positive right now.
Short term outlook
From a technical perspective, the AUD / USD is testing the 100 4-hour SMA around 0.7685, a consolidation below would expose the weekly low at 0.7664. Next, the next support is at 0.7635 / 40. If it stays above 0.7700, the Australian should keep the pressure under control.
Technical levels
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