AUD/USD Price Forecast: Breakdown below 0.6900 underpins bearish bias
- AUD/USD slumps to near 0.6850 as the Australian Dollar underperforms amid a risk-off mood.
- Australian PM Albanese announces that the government will halve fuel excise on petrol and diesel for three months.
- Traders see a 24.6% chance of at least an interest rate hike by the Fed this year.
The AUD/USD pair is down 0.3% around 0.6850 during the Asian trade at the start of the week. The Aussie pair faces selling pressure as risk-off impulse, driven by fears of escalating conflicts in the Middle East, is acting as a key drag on the Australian Dollar (AUD).
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.08% | -0.29% | -0.00% | 0.31% | 0.38% | 0.01% | |
| EUR | -0.02% | 0.04% | -0.29% | -0.02% | 0.33% | 0.36% | -0.02% | |
| GBP | -0.08% | -0.04% | -0.36% | -0.07% | 0.27% | 0.32% | -0.06% | |
| JPY | 0.29% | 0.29% | 0.36% | 0.29% | 0.62% | 0.66% | 0.29% | |
| CAD | 0.00% | 0.02% | 0.07% | -0.29% | 0.32% | 0.32% | 0.00% | |
| AUD | -0.31% | -0.33% | -0.27% | -0.62% | -0.32% | 0.05% | -0.31% | |
| NZD | -0.38% | -0.36% | -0.32% | -0.66% | -0.32% | -0.05% | -0.38% | |
| CHF | -0.01% | 0.02% | 0.06% | -0.29% | -0.00% | 0.31% | 0.38% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
S&P 500 futures slumps 0.4% in the Asian session, reflecting a dismal market sentiment. A report from the Wall Street Journal (WSJ) claiming that the United States (US) is considering 10,000 additional troops for ground military action against Iran and stark warnings from Tehran regarding the same have dampened demand for riskier assets.
On the domestic front, Australian Prime Minister (PM) Anthony Albanese has announced that the government will bring the fuel excise on petrol and diesel to 50% for three months, in an attempt to offer relief to households from rising energy prices due to energy supply disruption due to the Middle East war.
Meanwhile, the US Dollar (USD) trades almost flat, with the US Dollar Index (DXY) wobbling above 100.00 at the press time. The US Dollar is broadly upbeat as traders have priced out two interest rate cuts for the year, which were expected before the war started, amid higher energy prices, and now see a 24.6% chance of at least one hike, according to the CME FedWatch tool.
AUD/USD technical analysis
-1774837437692-1774837437694.png)
AUD/USD trades lower at around 0.6850 as of writing. The near-term bias turns bearish, following the breakdown of the key support level of the February 6 low around 0.6900.
The spot extends below the 20-day Exponential Moving Average (EMA), which now tracks higher around 0.6995 and acts as dynamic resistance. Price action has shifted into a sequence of lower highs and lower lows, confirming downside control after failing to sustain the 0.71 handle earlier in the month.
The 14-day Relative Strength Index (RSI) shift into the 20.00-40.00 zone for the first time in a year shows bearish momentum building but not yet oversold, keeping room for further weakness while sellers dominate rallies.
Initial support emerges at and then the 0.6750 region. A break below the latter would expose the January low around 0.6660. On the topside, the 0.6920 area forms first resistance ahead of the 0.6995 zone, where the 20-day EMA caps recovery attempts. A daily close back above 0.6995 would be needed to ease immediate bearish pressure and signal a more sustained rebound toward 0.7050.
(The technical analysis of this story was written with the help of an AI tool.)
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Artigos Recomendados
