AUD/USD Continues Downtrend Amidst External Pressures
Market Overview
- AUD/USD drops to a three-week low as sellers dominate for the fourth consecutive day.
- China’s lack of new stimulus plans dampens investor sentiment towards the Aussie.
- RBA’s September meeting minutes fail to provide significant support for the AUD.
The AUD/USD pair is on a downward trend for the fourth day in a row, reaching a three-week low on Tuesday. The Australian Dollar faced pressure after China’s National Development and Reform Commission highlighted the challenging economic conditions both internally and externally. The absence of new stimulus announcements from China’s state planner further weakened investor confidence. Coupled with a general market downturn, these factors have contributed to the decline in the risk-sensitive Australian Dollar.
Despite discussions within the Reserve Bank of Australia about potential interest rate adjustments in the future, the meeting minutes did little to excite AUD bulls. The US Dollar, on the other hand, remains below recent highs, providing some support for the AUD/USD pair above key technical levels.
Market Factors Influencing AUD/USD
- Investor sentiment impacted by geopolitical tensions and equity market performance.
- US labor market strength affecting expectations of Federal Reserve interest rate cuts.
- Upcoming economic data releases from the US to influence USD price dynamics.
Technical Outlook
Technical analysis suggests that the AUD/USD pair may find support near the 100-day SMA, with a potential downside towards the 200-day SMA if key levels are breached. On the upside, resistance levels at 0.6760-0.6770 and beyond indicate a shift in trend towards bullish territory.
Key Levels to Watch
- Support: 100-day SMA at 0.6690-0.6685, 200-day SMA at 0.6625-0.6620
- Resistance: 0.6760-0.6770, 0.6800, 0.6815-0.6820
Conclusion
The AUD/USD pair is currently facing downward pressure due to external factors and market sentiment. While technical analysis provides insight into potential price movements, upcoming economic data releases and geopolitical events will play a crucial role in determining the pair’s direction. Traders should monitor key support and resistance levels for potential trading opportunities.