AUD/USD falls to test key support levels, can buyers hold?

The low earlier today hit 0.6583 and that brings in a test of the 200-day moving average (blue line) at 0.6584. The 50.0 Fib retracement level also sits nearby at 0.6580, so there are key technical levels in play now for AUD/USD. The pair is already seeing its worst streak since August last year, and is poised for an eighth consecutive daily decline.

But amid a test of the key levels above, the onus is now on buyers to see if they have the appetite to hold price action from a further drop.

There are also some large expiries at 0.6600 today so that could help in drawing some flows before we get to US trading at least.

That being said, the bigger picture outlook for the pair continues to rest on the same few factors outlined from yesterday.

The Chinese yuan continues to stay pressured and that is weighing on the aussie indirectly. Meanwhile, equities are also on the backfoot today so the overall risk mood isn’t helping. The underwhelming earnings from Tesla and muddied outlook for Alphabet is weighing on tech shares so far today.

Then, there is also the dollar side of the equation to consider. The greenback has been keeping firmer across the board on the week, though it faces some challenges from key data. The US PMI data will be one to watch today, then Q2 GDP on Thursday, and the PCE price index on Friday.

Going back to AUD/USD, a technical breakdown below the 0.6580-84 region will be a massive blow to buyers. That frees up scope for the pair to explore a downside push towards 0.6500 at least next.

This article was written by Justin Low at www.forexlive.com.