The AUD/USD pair has been under pressure as the US Dollar Index (DXY) has shown signs of recovery, leading to a drop in the Aussie asset. The pair extended its losses to near 0.6714 in the early London session and is expected to continue its downward trend.
Factors contributing to the AUD/USD pair’s movement
Several factors are contributing to the movement of the AUD/USD pair. One of the primary factors is the strength of the US Dollar Index. The DXY has been building a base around 101.80 and has shown a recovery move, leading to a decrease in the value of the Australian dollar.
Another factor contributing to the movement of the AUD/USD pair is the current economic situation in Australia. The Australian economy has been struggling due to several factors, including weak consumer spending, low wage growth, and a slowdown in the housing market. As a result, investors have been pulling out of the Australian market, leading to a decrease in the value of the Aussie asset.
The ongoing trade war between the US and China is also contributing to the downward trend of the AUD/USD pair. Australia is heavily reliant on China for its exports, and any disruption in the trade relationship between the two countries can have a significant impact on the Australian economy. With the US imposing tariffs on Chinese goods, there are concerns that this could lead to a slowdown in the Chinese economy, which could, in turn, impact Australia’s exports and further weaken the Aussie dollar.
Technical analysis of the AUD/USD pair
Technical analysis of the AUD/USD pair shows that the asset is currently trading below its 200-day moving average, indicating a bearish trend. The pair has also broken below its support level of 0.6760, which could signal further downside in the coming weeks.
Investor sentiment towards the AUD/USD pair
Investor sentiment towards the AUD/USD pair is currently bearish, with many investors expecting the pair to continue its downward trend. With the US Dollar Index showing signs of strength and the Australian economy struggling, there is little reason for investors to be optimistic about the Aussie asset.
Conclusion
In conclusion, the AUD/USD pair has been under pressure due to several factors, including the strength of the US Dollar Index, the current economic situation in Australia, and the ongoing trade war between the US and China. Technical analysis of the pair indicates a bearish trend, and investor sentiment is currently negative towards the Aussie asset. As a result, the pair is expected to continue its downward trend in the coming weeks.
