AUD/USD Pair Seeks Stability Amidst Growing Global Uncertainties

24 jul 2023

During the Asian session, the AUD/USD pair managed to find temporary support around 0.6715. However, the Australian currency has been on a consistent decline for the past week, largely due to the US Dollar Index (DXY) staging a strong comeback. This resurgence of the US Dollar is fueled by optimistic expectations of another interest rate hike by the Federal Reserve (Fed).

As we move into the European session on Friday, the AUD/USD pair continues its downward trajectory, extending the sharp pullback from the mid-0.6800s level, which marked the weekly high. The current spot prices hover around 0.6750, representing both the weekly trough touched on Wednesday and the 50% Fibonacci retracement level of the recent rally that originated from levels below 0.6600 in late June.

Despite upbeat Australian jobs data released on Thursday, concerns loom over China's slowing economic growth, deteriorating US-China trade relations, and geopolitical risks. These factors overshadow the positive employment figures, putting pressure on the Reserve Bank of Australia (RBA) to consider further rate hikes. Adding to the downward pressure on the AUD/USD pair is the increased demand for the US Dollar (USD), supported by a significant decline in the Japanese Yen.

Overall, the AUD/USD pair faces challenges amidst global economic uncertainties and monetary policy dynamics, leading to a bearish trend in recent times.



TurnAround Point: 0.67625

Our preference

Short positions below 0.67625 with targets at 0.6710 & 0.6690 in extension.