Home Forex AUD/USD can’t find support, hitting fresh lows below 0.6540 amid risk aversion

AUD/USD can’t find support, hitting fresh lows below 0.6540 amid risk aversion

by SuperiorInvest
  • The US dollar is unstoppable amid risk aversion and positive US economic data.
  • U.S. yields rise slightly as Wall Street falls further.
  • AUD/USD extends weekly losses and trades at lowest level since May 202.

AUD/USD continued to decline during the US session due to risk aversion and a stronger dollar. The pair is trading under pressure at 0.6540, the lowest level in more than two years, while the DXY printed fresh 20-year highs near 113.00.

They all fall…

The dollar is the only king in town on Friday. Commodities are falling, including a 6% slide oil prices and a 4% drop in silver. Government bonds are also lower, only finding some demand as investors fly to quality. On Wall Street, the Dow Jones is down 1.51% and the S&P 500 is down 1.76%.

Concerns about a global recession and higher interest rates continue to weigh market sentiment which affects emerging and commodity currencies. The US dollar not only benefits from risk aversion on Friday but also from US economic data. The Preliminary September S&P Global PMI data showed a much stronger recovery than expected, especially in the services sector, which further strengthened the dollar.

Friday’s 100 pip drop in AUD/USD adds to weekly losses now approaching 200 pips. The pair is poised to record its lowest weekly close since May 2020. Despite oversold values, negative momentum remains firm.

Technical levels

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