AUD/USD Price Forecast: Hits fresh four-year low near 0.6100
The AUD/USD pair recovered slightly after hitting a fresh four-year low near 0.6100 but is still down more than 1.10% in the European session on Monday (3/2). The Australian currency pair faced a sharp sell-off as the Antipodean nations bear the cost of being China’s top trading partners.
Over the weekend, US President Donald Trump imposed 10% tariffs on China and 25% on Canada and Mexico. This led to a sharp decline in the appeal of the Australian Dollar (AUD), which is a China proxy.
In addition to the US tariffs on China, the Australian Dollar (AUD) also weakened in the domestic market amid growing expectations that the Reserve Bank of Australia (RBA) will move towards policy normalization from its February 18 policy meeting.
Meanwhile, the US Dollar (USD) strengthened as Trump’s tariffs have increased its appeal as a safe-haven currency. The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose above 109.50.
On Monday, investors will focus on the US ISM Manufacturing PMI for January, which will be published at 15:00 GMT.
AUD/USD has hit a fresh four-year low around 0.6100. The 20-week Exponential Moving Average (EMA) near 0.6375 is declining, indicating that the overall trend is bearish. The 14-week Relative Strength Index (RSI) is oscillating in the range of 20.00-40.00, indicating a strong bearish momentum.
More downside is likely if the pair breaks below the immediate support of 0.6100, which will take it towards the psychological support of 0.6000 and the low of March 26, 2020, at 0.5870.
On the other hand, a move above the January 13 high of 0.6330 would open up opportunities towards the round resistance level of 0.6400 and the December 5 high of 0.6456.
Source: FXstreet
