- AUD / USD witnessed strong selling on Tuesday and broke the 0.7300 support.
- The setup favors bearish traders and supports prospects for an extension of the slide.
- The next relevant bearish target is pegged near 0.7200.
The pair AUD/USD It continued to lose ground during the first hours of the American session and fell to the lowest level since November 2020, around the 0.7265 region in the last hour.
Risk aversion in the market, amid concerns about the COVID-induced global economic slowdown, acted as a tailwind for the safe-haven US dollar. This, in turn, was seen as a key factor that put strong downward pressure on the AUD / USD pair.
Looking at the technical outlook, sustained weakness below the horizontal support at 0.7330 was considered a key trigger for bearish traders. A subsequent decline below annual lows initially touched further compounded the selling bias surrounding the AUD / USD pair.
Meanwhile, the technical indicators on the daily chart remain deep in negative territory and are still far from being in the oversold zone. This validates the bearish breakout and supports the prospects for an extension of the ongoing decline.
Therefore, a drop near the 0.7250 level, en route to the next relevant support near the 0.7230-25 region and the 0.7200 level, remains a clear possibility. A convincing break below should pave the way for a further depreciation move.
On the other hand, any attempt at a recovery move now could face stiff resistance and is more likely to lose steam near 0.7300. This, in turn, should limit the AUD / USD close to the strong breaking point of the horizontal support at 0.7330.
Daily chart
Technical levels
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