**AUD/USD Faces Downward Pressure Amid Bearish Correction: In-Depth Analysis**
*Original insight by economies.com, expanded and supplemented with additional market viewpoints.*
—
## Market Overview
The Australian dollar (AUD), paired with the United States dollar (USD), has recently come under selling pressure. This move is reflective of a bearish corrective sentiment that has shaped short-term trading. The underlying forces propelling this trend are not isolated, interweaving global economic developments, risk appetite variations, and shifting central bank policies. This analysis will comprehensively explore the technical setup, delve into the fundamental catalysts, and provide both forecast scenarios and strategic tips for traders monitoring the AUD/USD pair.
—
## Recent Price Action
– The AUD/USD pair recently declined, moving beneath several key technical support zones.
– This drop is seen as part of a broader bearish corrective bias that started earlier in 2024.
– Market sentiment currently favors the US dollar over its major peers, including the Australian dollar.
**Technical Snapshot:**
– Current price action has slipped below the 0.6700 threshold, testing short-term support at 0.6650.
– Daily moving averages are starting to slope downward, reinforcing the negative momentum.
– The Relative Strength Index (RSI) hovers near oversold conditions, yet remains above critical thresholds, indicating room for further declines.
—
## Technical Analysis: Levels to Watch
A careful chart analysis offers crucial insight into the support-resistance structure surrounding AUD/USD.
**Key Support Levels:**
– **0.6650:** Immediate support and a level to watch for consolidation.
– **0.6610:** Next significant floor if the current support fails.
– **0.6560:** Deeper correction target, coinciding with prior swing lows.
**Key Resistance Levels:**
– **0.6700:** Recent breakdown area. A recovery above this level could signal temporary relief.
– **0.6745:** Next resistance aligned with the 50-period moving average on the 4-hour chart.
– **0.6795-0.6800:** Strong overhead resistance zone, tested multiple times in previous rallies.
**Technical Indicators:**
– **RSI (14, Daily):** Currently near 41, signaling increasing bearish momentum, but not yet at oversold extremes.
– **MACD:** The MACD histogram shows an expanding negative differential, confirming growing downside risk.
– **Moving Averages:** Both the 20- and 50-period EMAs have turned bearish, creating a downward cross and suggesting sellers are in control.
—
## Fundamental Drivers
Several broad economic and geopolitical forces are exerting downward pressure on the AUD against the USD:
### 1. Divergent Central Bank Policies
– The US Federal Reserve maintains a cautious outlook, indicating the possibility of further rate hikes or an extended period of elevated rates due to persistent inflationary concerns.
– The Reserve Bank of Australia (RBA) has signaled a more dovish stance, hinting at
Read more on AUD/USD trading.