**AUD/USD Technical Analysis: Downward Trend Towards 200-Day EMA**
*Original article by Christopher Lewis | Significantly expanded and supplemented with additional insights.*
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### Overview of Recent AUD/USD Performance
The Australian Dollar (AUD) has faced increasing pressure against the US Dollar (USD) in recent trading sessions. After initially attempting to rally, the AUD/USD pair encountered substantial resistance and began to decline, signaling a possible continuation of its bearish trend. Currently, the currency pair is closing in on its 200-day Exponential Moving Average (EMA), a widely followed technical indicator that could serve as a key level for traders to watch.
This extensive analysis draws upon insights from Christopher Lewis’s original article (source: MENAFN) and incorporates supplementary perspectives from financial institutions such as ING and Australia & New Zealand Banking Group (ANZ).
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### Recent Price Action and Technical Obstacles
– After an early attempt to push higher, the AUD/USD found resistance and rapidly reversed direction.
– The downward reversal was compounded by factors such as a strengthening US Dollar and new rounds of risk aversion in global markets.
– The pair is currently trading below the 50-day EMA, reinforcing the short-term bearish outlook.
– With the approach to the 200-day EMA, technical traders will be watching for price behavior around this key average as it often acts as dynamic support or resistance.
#### Key Support and Resistance Levels
– **Immediate support**: The 200-day EMA, currently situated around the 0.6560 mark, stands as the first support level. A decisive close below this level would likely intensify selling pressure.
– **Short-term resistance**: Resistance is anticipated between the 0.6700 and 0.6720 region, a range that capped the previous bullish attempt.
– **Additional support**: Should the decline continue, the 0.6500 threshold could serve as another notable support level, rooted in both technical and psychological significance.
#### Price Action Summary
– Sellers have controlled the market, as evidenced by the clear refusal at resistance and a steady drift lower.
– Volume analysis reveals increasing activity accompanying downward swings, suggesting genuine conviction among sellers.
– The inability of the pair to sustain even modest rallies signals underlying weakness, with risk of further downside if global risk sentiment continues to falter.
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### Broader Catalysts Influencing AUD/USD
#### US Dollar Strength
The US Dollar has experienced a resurgence lately, driven by a combination of:
– **Positive US economic data**: Strong jobs numbers and better-than-expected retail sales have supported the USD.
– **Hawkish Federal Reserve rhetoric**: Members of the US Federal Reserve have reiterated their focus on keeping monetary policy tight to contain inflation, reducing the likelihood of near-term interest rate cuts.
– **Safe-haven demand**: Amid ongoing geopolitical tensions and concerns over the global economic outlook, the Dollar has attracted safe-haven flows, to the detriment of risk-sensitive currencies like the AUD.
#### Chinese Economic
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