AUD/USD keeps lower on the day amid the risk-off mood
The pair is down by 0.5% on the day, as the aussie is weaker amid the risk-off mood while the dollar is keeping firmer on the same reason. But upon a break of the 200-hour MA (blue line) towards the end of last week, sellers are building on that for now.
The near-term bias in the pair remains more bearish and keeping below 0.6400 will be the first challenge for sellers in the sessions ahead.
There is some near-term support around 0.6374 from the 61.8 retracement level of the recent swing move higher, and that is what stalled the downside move earlier today.
A break below that will give sellers more conviction in looking for a move towards 0.6300.
It is going to be all about risk as we get the week started and right now, things are on the defensive amid escalating US-China tensions.
Headline risks are paramount but the fact that the S&P 500 is being rejected further at its 61.8 retracement level only adds to reason for risk trades to pull back.
Month-end dollar rebalancing flows are among the things cited for the greenback weakness last week. So, if that has been flushed out and risk trades are having second doubts, this could lead to something bigger and more painful for the aussie.
On the daily chart:
The upside move stalled at the 100-day MA (red line) and sellers have used that as a key level to lean on to drive price lower amid the shift in risk sentiment.
The key level to watch on the downside will be the 21 April low @ 0.6254. A break below that will present a slippery slope for the pair especially if risk deteriorates further.
