AUD/USD down to six-week lows on higher dollar, softer risk mood

The pair held daily support from this month’s low of 0.6870 on January 19, but today it finally seems to be giving way as it fell to 0.6830. Today’s decline takes the price down 0.7% to its lowest level since January 6, as the dollar runs hot and stocks remain on the defensive. This means that the buyers are still there for the most part. Despite the rejection at the August high of 0.7125-36 during the early year rally, the latest pullback has yet to break technical support. This is visible in the 200-day moving average (blue line) currently at 0.6802 before trend support (white line) from October to November at 0.6785 comes into play. Additionally, there is also an ascending 38.2 Fib retracement level of October 0.6780. And further below, the 100-day moving average (red line) is 0.6705. As such, sellers need to peel back multiple layers to make a really strong AUD/USD bearish. While we currently see the dollar strengthening, sellers still have more work to do to formalize the pair’s significant decline.