The AUDUSD is trading to the lowest level since July 15 (see weekly chart above). The move to the downside this week has moved below a swing area between 0.6826 and 0.68597 (see chart above) those levels represent some swing lows going back to May 2022. The low price just reached 0.6777.
On the downside, looking at the weekly chart the pair is approaching the 50% midpoint of the move up from the 2020 low. That level comes in at 0.6756. The price just got within 21 pips of that target level. Swing lows from the week of June 26 and July 3 bottomed just above that midpoint level (at 0.6760 and 0.6763 respectively).
During the week of July 10, the price extended lower to a another swing area on the weekly chart down near 0.6656 to 0.66842. The price bounced off that level. That low for the year is an obvious downside target on the break of the 50% midpoint level.
Drilling to the hourly chart below, the price traded above and below a swing area between 0.68521 and 0.6858 on Monday Tuesday and again on Wednesday. Today, the corrective high off of the Asian session low stalled ahead of that swing area (see yellow area in the chart below). I give sellers some added confidence. The higher dollar in the US session has led to the continuation to the downside.
Fundamentally, China news today weaken the pair. The Caixin manufacturing PMI at of China fell back below the 50 level indicative of a contraction. In addition new lockdown measures were in place in Chengdu as China's zero Covid policy continues to pressure businesses and consumers. Australia is geographically tied to China's fortunes.
Stocks declining also leads to risk off flows. The Dow industrial average is down 126 points or -0.4%. The more interest rate sensitive NASDAQ index is down -240 points or -2.04%. The Russell 2000 is down -39 point -2.13%.
