AUD/USD Hammered Down To Weekly Low Around 0.6900 Mark, Bears Eye 50-Day SMA

The AUD/USD pair comes under intense selling pressure on Wednesday and retreats further from over a one-week high, around the 0.7025-0.7030 region touched the previous day. The pair maintains its heavily offered tone through the early European session and is currently placed near the weekly low, around the 0.6900 round-figure mark.

The US Dollar stands tall near a multi-week high amid expectations for further policy tightening by the Federal Reserve and is seen as a key factor dragging the AUD/USD pair lower. Investors seem convinced that the US central bank will stick to its hawkish stance for longer due to stubbornly high inflation.

On Tuesday, the crucial US CPI report and comments by several FOMC members reaffirmed the bets. Apart from this, the overall risk-off mood – as depicted by a generally weaker tone around the equity markets – further benefits the safe-haven Greenback. The recent yield curve inversion adds to worries about an impending recession and takes its toll on the global risk sentiment.

This is seen as another factor weighing on the risk-sensitive Aussie and contributing to the offered tone surrounding the AUD/USD pair. With the latest leg down, spot prices have moved closer to the 50-day SMA support.

A convincing break below will be seen as a new trigger for bearish traders and set the stage for an extension of the AUD/USD pair’s recent retracement slide from the highest level since June 2022. Traders now look to the US economic docket, featuring monthly Retail Sales and the Empire State Manufacturing Index, for a fresh impetus.

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