**AUD/USD and EUR/AUD Technical Analysis: Australian Dollar Faces Ongoing Pressure**
*Originally written by Matt Weller, FOREX.com*
The Australian Dollar (AUD) has remained under pressure against multiple major currencies, notably the US Dollar (USD) and the Euro (EUR). Following fluctuating economic indicators and market sentiment, recent technical setups indicate continued weakness in AUD unless specific price levels are decisively reclaimed. Traders and investors are closely monitoring price action around major support and resistance zones to gauge the next directional move in currency pairs like AUD/USD and EUR/AUD.
This article provides a comprehensive technical analysis of AUD/USD and EUR/AUD, incorporating key chart patterns, support/resistance levels, and momentum indicators. It expands on points originally outlined by Matt Weller of FOREX.com and provides further commentary to give traders a broader perspective on potential scenarios.
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## Overview of Australian Dollar Trends
Several macroeconomic factors are currently weighing on the Australian Dollar, among them:
– Softer-than-expected domestic economic data, including subdued consumer spending and stagnant wage growth.
– Dovish signals from the Reserve Bank of Australia (RBA) suggesting interest rate hikes may be paused or even reversed if economic conditions slow further.
– Declining demand for key Australian export commodities, such as iron ore and coal, which often serve as proxies for AUD strength.
– Broader risk-off sentiment in global markets, which tends to weigh heavily on AUD’s performance due to its categorization as a risk-sensitive currency.
Rising interest rate expectations in both the US and the EU have further impacted the value of AUD due to widening yield differentials, especially in the context of comparatively modest economic momentum coming out of Australia.
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## AUD/USD Technical Outlook
The AUD/USD currency pair has been trading in a clear bearish pattern for several sessions, continuing its downward momentum after failing to breach key resistance zones. The bulls attempted a rebound but have failed to reclaim key retracement levels, indicating a lack of sustained buying interest.
### Technical Indicators: Mixed Signals
– **Downward-sloping trendline:** AUD/USD remains below a key descending trendline, which has consistently provided dynamic resistance over recent weeks. This line has guided the pair lower from near 0.6800 toward current levels.
– **50-day and 200-day EMAs:** The pair trades beneath both the 50-day and 200-day exponential moving averages (EMAs), reflecting a bearish longer-term trend. Both EMAs continue to slope downward, adding to broad selling pressure.
– **Fibonacci Levels:** The 61.8% Fibonacci retracement drawn from the previous major upward move (from 0.6450 to 0.6900) was broken decisively to the downside, suggesting a retracement toward the base of the move is increasingly likely.
– **Support levels:**
– Immediate support lies at 0.6520.
– A break below this could expose the next significant support near 0.6450.
– **Resistance levels:**
– Initial resistance stands around 0.6600.
– Stronger resistance can be seen at the 0.6675 area, aligning with prior swing highs and the 50-day EMA.
### Bearish Continuation Pattern
AUD/USD recently formed a bearish flag following a sharp move lower. This continuation pattern suggests that the currency pair could resume its downtrend after a brief consolidation period. Price action is currently respecting the lower boundary of the flag and may test the recent lows first before determining its next major move.
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## EUR/AUD Technical Outlook
In contrast, the EUR/AUD pair has shown relative strength, advancing in recent sessions on the back of stronger Eurozone data and increasing expectations of further European Central Bank (ECB) policy tightening. The Aussie’s weakness across the board has facilitated upward movement in this cross.
### Key Bullish Developments
– **Break above resistance:** EUR/AUD broke through the prior resistance level at 1.
Read more on EUR/USD trading.