AUD/USD Forecast: Aussie plunges alongside markets’ sentiment

AUD/USD Current Price: 0.6303

• The Australian AIG Performance of Services Index plunged to 48 in September.
• Global stocks edged lower, dragging AUD/USD into a fresh two-year low.
• AUD/USD battles with 0.6300 as bears take control of the pair.

The Australian dollar is among the worst performers against the greenback, with AUD/USD falling to 0.6274, its lowest since April 2020. The AUD fell amid a generalized dismal market mood, exacerbated by poor Australian data. The country released the AIG Performance of Services Index, which contracted in September to 48 from 53.3 in the previous month.

Furthermore, stock markets have traded in the red ever since the start of the day. Equities sell-off last week took its toll on Chinese stocks, which returned after a long holiday, as the country celebrated Golden Week.

On Tuesday, Australia will publish September NAB’s Business Conditions, foreseen at 18 from 20 in the previous month, and NAB’s Business Confidence, expected to have fallen to 5 from 10 in August.

AUD/USD short-term technical outlook

The AUD/USD pair heads into the Asian opening trading around the 0.6300 figure, as the greenback lost steam mid-US-afternoon. The daily chart shows that chances are of another leg south as technical indicators keep heading south near oversold readings. Furthermore, the pair is far below all of its moving averages, with the 20 SMA accelerating its slide above the current level, currently at around 0.6550.

The 4-hour chart also shows that bears are in control of the pair. The 20 SMA keeps heading lower below the longer ones but above the current price, reflecting persistent selling interest. At the same time, technical indicators have reached oversold readings, barely recovering and falling short of suggesting a potential recovery.

Support levels 0.6270 0.6230 0.6190

Resistance levels: 0.6340 0.6380 0.6425

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