AUDUSD is experiencing a decline as risk-off sentiment impacts trading, following a drop in U.S. stocks. On Friday, the pair reached a high of 0.6407 but reversed direction due to falling equities.
The NASDAQ initially rose by 120 points but later fell, recording a session low of -248 points. This volatility contributed to pushing AUDUSD lower, leading it to test the 200-hour moving average support at 0.6346, where buyers managed to hold this level.
The 100-hour moving average at 0.6367 now serves as resistance. Traders are likely to keep an eye on stock market trends for further guidance.
With markets showing hesitation, the Australian dollar’s downturn reflects broader caution among traders. A brief surge last Friday saw the pair testing 0.6407, but this rally was cut short as selling pressure built up amid a worsening sentiment tied to U.S. equities. The Nasdaq’s fluctuations played a central role, with an initial gain of 120 points quickly unraveling into a 248-point decline by the end of the session. This reversal fuelled further weakness in AUDUSD, driving it towards 0.6346, where buying interest re-emerged near the 200-hour moving average.
Now, with 0.6367 acting as an overhead barrier, traders will need to assess whether buyers have the strength to reclaim higher ground. For now, the short-term focus remains on stock market performance. A stabilisation in equities could ease some of the downward pressure, but any further sell-offs in risk assets may keep the pair under strain.
As we navigate the days ahead, attention shifts to upcoming economic data and broader sentiment across financial markets. U.S. economic indicators will be watched closely, as they could influence expectations around monetary policy. Meanwhile, shifts in bond yields may also feed into currency movements, particularly if investors continue adjusting their outlook. Should sellers maintain control, another test of recent lows could be on the cards, but any reversal in risk appetite may invite renewed buying interest.
