The AUDUSD experienced a notable decline of -4.40%, marking its largest single-day drop since September 2012. This decline was prompted by a break below significant moving averages and the escalating trade tensions following China’s announcement of retaliatory tariffs.
The price fell below previous support levels, reaching 0.6074, which is below the early February low of 0.6087. A temporary rebound occurred but quickly reversed, establishing sellers strongly in control.
Potential Buyer Recovery
For a potential buyer recovery, the price must first move above 0.6087, followed by a sustained break above 0.6131. The next target to watch is around 0.5985, the lowest levels seen since April 2020.
The existing passage outlines a sharp depreciation in the Australian dollar (AUD) against the US dollar (USD), triggered by a combination of technical breaches and external catalysts—specifically, retaliatory tariffs announced by China. The 4.4% move to the downside is not typical in the currency markets, which suggests a growing lack of confidence or abrupt repricing in response to fresh geopolitical or economic signals. The breach of key support levels around 0.6087, a level that held earlier this year, led to a further slide, with prices dipping to 0.6074. That figure brings the pair uncomfortably close to the psychological boundary of 0.6000, which carries historic relevance from the early days of the pandemic, especially around April 2020.
Price action did attempt a momentary bounce. However, that effort lacked follow-through and was swiftly overturned, reinforcing that sellers currently dominate. In technical terms, this implies persistent downward pressure unless a firm reclaim of 0.6087 occurs. And even then, unless followed by sustained price action above 0.6131, confidence in a reversal remains low.
Directional Pressure And Market Sentiment
Looking ahead into the next several sessions, the ongoing directional pressure could persist if we continue to see risk aversion tied to global trade strains. Given that sentiment has so far failed to respond positively to minor dips, the current trajectory suggests that the 0.5985 region may act as a magnet. That level has historical precedent: it aligns closely with the bottom mapped in Q2 2020 and could act as a psychological test for broader AUDUSD sentiment.
Shifting our approach, we ought to treat short-term rebounds with caution. The character of this price action—failing rebounds amid a structure of lower highs—points to an asymmetric risk profile tilted to the downside. For now, holding above intraday lows hasn’t been enough to invite new positioning from the buy side, which is another cue that seller motivation remains active.
We’ve seen in the past that such trends build momentum when key thresholds fail to hold. Any minor upticks toward broken support should now be monitored as potential resistance cues. For example, moves towards 0.6087 may now be offering selling interest. That’s especially true if we continue to see muted reaction to broader market risk sentiment or commodity-linked flows.
In short, the immediate directional bias remains absent of clear reversal signs. We’d caution against reacting too quickly to minor reversals unless the price reclaims lost ground convincingly and holds steady above previous pivot zones. Otherwise, continued pressure below 0.6000 looks increasingly likely.
