#AUDUSD @ 0.65785 descends to its lowest level since May 2020 amid blowout USD rally to 20-year top (Pivot Orderbook analysis)

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The pair currently trades last at 0.65785.

The previous day high was 0.6671 while the previous day low was 0.6574. The daily 38.2% Fib levels comes at 0.6634, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6611, expected to provide resistance.

The AUD/USD pair continues losing ground through the first half of the European session on Friday and drops to the 0.6565 area or its lowest level since May 2020.

The US dollar catches fresh bids on the last day of the week and hits a new 20-year peak, which turns out to be a key factor exerting downward pressure on the AUD/USD pair. The Federal Reserve struck a more hawkish tone on Wednesday and signalled that it will undertake more aggressive rate increases to cap inflation. This, in turn, remains supportive of elevated US Treasury bond yields and continues to act as a tailwind for the greenback.

In fact, the yield on the rate-sensitive two-year US government bond touched a fresh 15-year high and the benchmark 10-year Treasury note jumped to its highest level since 2011 on Thursday. Meanwhile, investors remain concerned that rapidly rising borrowing costs will lead to a deeper global economic downturn. This, in turn, tempers investors’ appetite for riskier assets and is further underpinning demand for the traditional safe-haven buck.

Apart from this, economic headwinds stemming from China’s zero-covid policy and the risk of a further escalation in the Russia-Ukraine conflict, have been fueling recession fears. This is seen as another factor contributing to driving flows away from the risk-sensitive aussie. With oscillators still far from being in the oversold territory, the fundamental backdrop supports prospects for an extension of the depreciating move for the AUD/USD pair.

Market participants now look forward to the release of the flash US PMI prints, due later during the early North American session. This, along with the US bond yields and Fed Chair Jerome Powell’s speech at an event in Washington, will influence the USD price dynamics and provide some impetus to the AUD/USD pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities heading into the weekend.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6567 at the time of writing. Pair opened at 0.6644 and is trading with a change of -1.16 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6775, 50 SMA 0.6882, 100 SMA @ 0.6933 and 200 SMA @ 0.7097.

The previous day high was 0.6671 while the previous day low was 0.6574. The daily 38.2% Fib levels comes at 0.6634, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6611, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.6589, 0.6533, 0.6492
• Pivot resistance is noted at 0.6685, 0.6726, 0.6782

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