|

AUD/USD slides further below mid-0.6400s amid notable USD demand, risk-off impulse

  • AUD/USD comes under renewed selling pressure and is pressured by a combination of factors.
  • Mixed Australian CPI report for August, the risk-off impulse weighs on the risk-sensitive aussie.
  • A goodish pickup in the US bond yields revives the USD demand, which contributes to the slide.

The AUD/USD pair struggles to capitalize on the overnight solid bounce of over 150 pips from its lowest level since April 2020 and meets with a fresh supply on Thursday. The pair extends its intraday descent through the early European session and slides back below mid-0.6400s, hitting a fresh daily low in the last hour.

The Australian dollar started losing ground after the first monthly consumer inflation report showed that price pressures may be starting to ease. In fact, the Australian Bureau of Statistics reported that the headline CPI eased to a 6.8% YoY rate in August from 7% in the previous month. Excluding the volatile food and energy prices, the gauge edged up to 6.2% during the reported month. This, along with resurgent US dollar demand, prompts fresh selling around the AUD/USD pair.

Following the previous day's dramatic turnaround from a new two-decade high, the USD regains positive traction amid a goodish pickup in the US Treasury bond yields. Investors seem convinced that the Fed will hike interest rates at a faster pace to curb inflation. The bets were reaffirmed by the recent hawkish remarks by a slew of FOMC officials, which, in turn, acts as a tailwind for the US bond yields. Apart from this, the risk-off impulse further underpins the safe-haven buck.

The market sentiment remains fragile amid worries that a more aggressive policy tightening by major central banks will lead to a deeper economic downturn. Adding to this, the risk of a further escalation in the Russia-Ukraine conflict has been fueling recession fears and taking its toll on the global risk sentiment. This is evident from a fresh leg down in the equity markets, which forces investors to take refuge in traditional safe-haven assets and weighs on the risk-sensitive aussie.

The fundamental backdrop suggests that the path of least resistance for the AUD/USD pair is to the downside and attempted recoveries might still be seen as a selling opportunity. Market participants now look forward to the US economic docket, featuring the final Q2 GDP print and the usual Weekly Initial Jobless Claims. Traders will also take cues from speeches by FOMC members, which, along with the US bond yields, should drive the USD and provide some impetus to the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price0.6452
Today Daily Change-0.0071
Today Daily Change %-1.09
Today daily open0.6523
 
Trends
Daily SMA200.6696
Daily SMA500.6853
Daily SMA1000.6913
Daily SMA2000.7084
 
Levels
Previous Daily High0.6531
Previous Daily Low0.6363
Previous Weekly High0.6748
Previous Weekly Low0.6512
Previous Monthly High0.7137
Previous Monthly Low0.6835
Daily Fibonacci 38.2%0.6467
Daily Fibonacci 61.8%0.6427
Daily Pivot Point S10.6414
Daily Pivot Point S20.6305
Daily Pivot Point S30.6246
Daily Pivot Point R10.6581
Daily Pivot Point R20.664
Daily Pivot Point R30.6749

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD holds steady above 1.1750 as traders await FOMC Minutes

The EUR/USD pair holds steady near 1.1770 during the early Asian session on Tuesday. Traders continue to price in the prospect of further rate cuts by the US Federal Reserve in 2026, following the 25-basis-point rate reduction delivered at the December meeting. The release of the Federal Open Market Committee Minutes will be in the spotlight later on Tuesday.

GBP/USD finds key support near 1.35 despite year-end grind

GBP/USD remains bolstered on the high end as markets grind through the last trading week of the year. Cable caught a bullish tilt to keep price action on the high side of the 1.3500 handle, though year-end holiday volumes are unlikely to see significant progress in either direction as 2025 draws to a close.

Gold holds above $4,300 after setting yet another record high

Spot Gold traded as high as $4,550 a troy ounce on Monday, fueled by persistent US Dollar weakness and a dismal mood. The XAU/USD pair was hit sharply by profit-taking during US trading hours and retreated towards $4,300, where buyers reappeared.

Ethereum: BitMine continues accumulation, begins staking ETH holdings

Ethereum treasury firm BitMine Immersion continued its ETH buying spree despite the seasonal holiday market slowdown. The company acquired 44,463 ETH last week, pushing its total holdings to 4.11 million ETH or 3.41% of Ethereum's circulating supply, according to a statement on Monday. That figure is over 50% lower than the amount it purchased the previous week.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Crypto market outlook for 2026

Year 2025 was volatile, as crypto often is.  Among positive catalysts were favourable regulatory changes in the U.S., rise of Digital Asset Treasuries (DAT), adoption of AI and tokenization of Real-World-Assets (RWA).