**AUD/USD Faces Persistent Selling Pressure, Raising Risk of Larger Downturn**
*Based on the analysis by EconoTimes (original author: EconoTimes Staff Writer, https://www.econotimes.com/FxWireProAUD-USD-attracts-selling-interest-could-be-on-verge-of-a-bigger-drop-1729880).*
In recent Forex market activity, the Australian dollar (AUD) versus the U.S. dollar (USD) currency pair has garnered notable selling interest. The AUD/USD pair is now approaching a critical juncture that could potentially signal a more significant downward move. Traders and analysts have been closely monitoring the pair, which has exhibited both technical and fundamental signals suggesting the possibility of a larger correction.
This in-depth analysis explores the underlying drivers for the weakening AUD/USD, reviews the latest technical chart patterns, examines macroeconomic influences, and considers further perspectives from other reputable Forex analysis.
—
### Current Price Action and Market Sentiment
The AUD/USD pair has struggled to maintain bullish momentum, facing increased headwinds from global factors and domestic economic indicators.
**Recent Observations:**
– **Episode of selling:** Price action shows persistent lower highs and relatively weak recoveries after intraday rebounds.
– **Volume patterns:** Higher-than-average trading volume has coincided with notable downswings, reflecting institutional participation in selling the pair.
– **Bearish sentiment:** Sentiment among traders and analysts remains skewed toward further downside, given ongoing macroeconomic developments and technical patterns.
—
### Key Technical Analysis
**Support and Resistance Levels:**
– *Immediate resistance:* The cluster of previous highs around 0.6920–0.6950
– *Key supports:* Notable support exists near 0.6750, with further downside toward 0.6700 if that region breaks
– *Longer-term resistance:* The psychological level of 0.7000 remains a ceiling for price advances
**Indicators and Chart Signals:**
– *Moving averages:* The 21-day and 55-day exponential moving averages (EMA) are rolling over, with the price currently trading below both. This cross-over often signals a continuation of price weakness.
– *RSI (Relative Strength Index):* Current readings suggest the pair is not yet oversold, leaving ample room for further declines.
– *MACD (Moving Average Convergence Divergence):* The indicator is firmly in negative territory, confirming bearish momentum.
– *Chart patterns:* The AUD/USD is forming a sequence of lower highs and lower lows, which typically precedes further declines.
—
### Macro Drivers Pressuring AUD/USD
There are several macroeconomic and cross-asset factors contributing to the downside risk facing the Australian dollar.
**1. Divergence in Monetary Policy:**
– The U.S. Federal Reserve’s hawkish bias, driven by persistent inflation, has increased demand for the U.S. dollar. Favorable U.S. yields relative to Australian yields incentivize investors to favor the greenback over
Read more on AUD/USD trading.