Technical Analysis

AUD/USD extends decline as dollar holds firm amid cautious market sentiment

AUD/USD slips to a low of 0.6873


There isn’t much else stopping the pair from a further fall if you’re looking at the daily chart. Further support is only seen around the January 2016 lows @ 0.6827-40 next so that will be a key level to watch out for over the next few sessions.

Risk sentiment remains more cautious as US equity futures are now down by over 0.4% and Treasury yields are beginning to slip again. As a result, the dollar and yen are benefiting from a bit of safety flows with EUR/USD also falling to a low of 1.1159 on the session.

The AUD/USD chart looks ugly and there’s no point in trying to catch a falling knife right now, particularly when there’s election risk to consider for the aussie ahead of the weekend as well as traders looking to price in a rate cut by the RBA for the 4 June meeting.

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