- AUD/USD continues losing ground for the third straight day and drops to over a two-year low.
- The post-FOMC USD rally remains uninterrupted and continues to exert downward pressure.
- The risk-off impulse further contributes to driving flows away from the risk-sensitive aussie.
The AUD/USD pair remains under heavy selling pressure for the third straight day on Thursday and drops to the 0.6580 region - the lowest since May 2020 during the early European session.
The US dollar builds on the previous day's post-FOMC breakout momentum and hits a fresh 20-year high, which, in turn, is seen as a key factor dragging the AUD/USD pair lower. It is worth recalling that the Fed raised interest rates by another 75 bps on Wednesday and signalled that it will likely undertake more aggressive rate increases to cap inflation. This, along with the prevalent risk-off environment, provides an additional lift to the safe-haven greenback.
The market sentiment remains fragile amid growing worries about a deeper economic downturn and the risk of a further escalation in the Russia-Ukraine conflict. In the latest development, Russian President Vladimir Putin announced an immediate partial military mobilization and threatened to use all the means to defend Russia and its people. This, in turn, takes its toll on the global risk sentiment and contributes to driving flows away from the risk-sensitive aussie.
With the latest leg down, the AUD/USD pair confirms this week's bearish breakdown through the 0.6700 mark. A subsequent slide below descending trend-line support extending from December 2020 might have already set the stage for additional weakness. Given that technical indicators on the daily chart are still far from being in the oversold territory, spot prices seem vulnerable to extending the descending trend and aim toward testing the 0.6500 psychological mark.
Technical levels to watch
|Today last price||0.6585|
|Today Daily Change||-0.0044|
|Today Daily Change %||-0.66|
|Today daily open||0.6629|
|Previous Daily High||0.6706|
|Previous Daily Low||0.6622|
|Previous Weekly High||0.6916|
|Previous Weekly Low||0.667|
|Previous Monthly High||0.7137|
|Previous Monthly Low||0.6835|
|Daily Fibonacci 38.2%||0.6654|
|Daily Fibonacci 61.8%||0.6673|
|Daily Pivot Point S1||0.6599|
|Daily Pivot Point S2||0.6568|
|Daily Pivot Point S3||0.6515|
|Daily Pivot Point R1||0.6683|
|Daily Pivot Point R2||0.6736|
|Daily Pivot Point R3||0.6767|
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.