The AUD/USD pair faced renewed selling pressure on Friday, extending its decline during the early European session.
Spot prices reached a fresh daily low after weaker-than-expected Chinese trade data was released. Despite this, the pair managed to stay above the psychological level of 0.6500 and rebounded slightly in the last hour.
A meaningful recovery remains unlikely due to continued strong US Dollar (USD) buying, supported by expectations of the Federal Reserve (Fed) maintaining higher interest rates in response to persistent US inflation. Additionally, ongoing geopolitical tensions from conflicts in the Middle East are benefiting the safe-haven Greenback, further limiting gains for the risk-sensitive Aussie.
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Technically, the AUD/USD pair has held above the 0.6500 mark, which is now a key pivot point. However, with oscillators on the daily chart showing negative momentum, a clear break below 0.6500 could trigger more bearish sentiment and lead to a continuation of the recent pullback from the 0.6645 area, a one-month high reached earlier this week.
Further selling below 0.6480, the monthly low, would confirm the negative bias and open the door for a retest of the year-to-date trough around 0.6445-0.6440, recorded in February. The downward trend could then target the 0.6400 level before testing the next significant support near 0.6355-0.6350.
Conversely, any upside recovery is likely to face strong resistance around 0.6545-0.6555, which aligns with the crucial 200-day Simple Moving Average (SMA). This is followed by the 100-day SMA near 0.6600, above which a short-covering rally could push the AUD/USD pair towards the 0.6640-0.6645 area, the monthly high.