- Risk aversion weighed on high-beta currencies like the Australian Dollar.
- Global central banks hiking rates and eyeing additional increases sounded recession alarms, dampening investors’ mood.
- AUD/USD Price Analysis: Downward biased, after tumbling from weekly highs, heading to the 50-day EMA.
The Australian Dollar (AUD) slides against the US Dollar (USD) amidst a dampened market sentiment as an economic slowdown looms, after a central bank bonanza, featuring the US Federal Reserve (Fed), the Bank of England (BoE), and the European Central Bank (ECB) raising rates by 50 bps each. Additionally, policymakers emphasized the need to do what’s needed to tackle inflation, which keeps investors uneasy. Therefore, the AUD/USD is trading at 0.6690, below its opening price.
AUD/USD Price Analysis: Technical outlook
After Thursday’s drop from around 0.6870 toward 0.6670, the AUD/USD is poised for a deeper correction. Market sentiment, and technical factors led by buyers unable to decisively clear the 200-day Exponential Moving Average (EMA) at 0.6831, exacerbated the Aussie Dollar’s fall toward current exchange rates. On its way south, the AUD/USD cleared the 20-day EMA at 06724, which halted Friday’s upside, as the AUD/USD is set to finish the week with losses of 1.60%.
Furthermore, a break below December 15 swing low at 0.6676 could exacerbate the AUD/USD’s fall toward the 50-day EMA at 0.6658, accelerating the downtrend to the 0.6600 mark. Oscillators like the Relative Strength Index (RSI) crossed to bearish territory, while the Rate of Change (RoC), is headed to the downside, cementing the case for a deeper correction.
As an alternate scenario, if the AUD/USD reclaims the 0.6700 mark, a test of the 200-day EMA at 0.6831 is on the cards. A breach of the latter will expose 0.6916 September’s 13 high, followed by the 0.7000 psychological mark.
AUD/USD Key Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD struggles near multi-month low below 0.6400, US CPI eyed
AUD/USD enters a bearish consolidation phase near a multi-month low of 0.6365 set on Tuesday. China's economic woes and less hawkish RBA remain a drag on the pair. Traders await the US CPI report on Wednesday before placing fresh directional bets.
USD/JPY drops from 152.00 after Japanese PPI data
USD/JPY eases from 152.00 in Wednesday's Asian trading, stalling a two-day uptrend. A hot Japan PPI report leaves the door open for a BoJ rate hike next week, supporting the Japanese Yen while the US Dollar upswing takes a breather ahead of the US CPI data release.
Gold price holds firm at around $2,700 ahead of US CPI report
Gold price sticks to its positive bias for the third straight session and advances to over a two-week high near $2,700 early Wednesday. Geopolitical tensions and the resumption of buying by China’s central bank for the first time in seven months act as a tailwind for the XAU/USD.
Ripple's XRP breaks out of downtrend as RLUSD receives greenlight from New York regulators
Ripple's CEO Brad Garlinghouse announced on Tuesday that the company received a green light from the New York Department of Financial Services on the launch of its stablecoin RLUSD.
How the US-China trade dispute is redefining global trade
Since Donald Trump took office in 2017, trade flows and market shares have changed substantially. We think that shift is set to continue under looming tariffs and a new protectionist environment.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.