The AUD/USD pair remains under heavy selling pressure for the third successive day and drops to its lowest level since January 6 heading into the North American session on Friday. The pair is currently placed around the 0.6825 region, down over 0.70% for the day, and seems vulnerable to decline further.

From a technical perspective, the overnight breakdown below the 50-day Simple Moving Average (SMA) for the first time since November 2022 was seen as a fresh trigger for bears. Moreover, oscillators on the daily chart have just started drifting into negative territory and support prospects for an extension of the recent sharp pullback from the highest level since June 2022.

Spot prices seem poised to weaken further below the 0.6800 round-figure mark and accelerate the fall towards the next relevant support near the 0.6740-0.6735 region. This is followed by the 100-day SMA, currently around the 0.6715-0.6710 zone, which if broken decisively should set the stage for a further near-term depreciating move for the AUD/USD pair.

Fresh bearish acceleration on Friday (the pair was down 0.7% in Asia / early Europe) cracks the upper boundary of strong support zone at 0.6820/0.6780 zone, consisting of the top of rising daily cloud, 200DMA and Fibo 38.2% of 0.6170/0.7157).

On the flip side, the 50-day SMA support breakpoint, currently pegged just ahead of the 0.6900 mark, now seems to act as an immediate strong hurdle. Some follow-through buying could lift the AUD/USD pair towards the 0.6945-0.6950 horizontal resistance, above which a fresh bout of a short-covering move should allow bulls to aim to conquer the 0.7000 psychological mark.

AUDUSD set to resume its bearish trend on daily cycle

Feb 18 2023