AUD/USD Price Pushing Below 0.69 Amid Collapsing Commodity Prices

• The looming global recession is hurting commodity prices and Australia’s commodity-dependent economy.
• The US dollar rally might resume as the Fed remains committed to lowering inflation.
• The Bears might attempt a lower low on the charts.

The AUD/USD price is pushing lower on Friday after yesterday’s bearish close. The commodity-sensitive pair is reacting to the recent collapse in commodity prices due to the looming global recession. This week has seen commodities decline over worries that rising interest rates will eventually push the global economy into a recession.

-Are you interested in learning about forex live calendar? Click here for details-

“While market worries about an abrupt slowdown are the culprit behind recent moves lower in raw materials prices, lower commodity prices do feel like they could be just what the doctor ordered for the global economy,” said NatWest market strategist Brian Daingerfield.

On the other hand, the US dollar closed higher yesterday. This short rally could continue after Jerome Powell stressed the Fed’s ambition to tame inflation on his second day of Congressional testimony.

“Recession talk has upset the DXY uptrend, but we don’t think retracements have legs beyond the low 102s. Fed Funds is set to rise above 3% by year’s end, so USD interest rate support should continue to build,” Westpac strategists wrote in a client note.

AUD/USD key events today

Investors will be listening to a speech from the Reserve Bank of Australia Governor Philip Lowe, later today. His speeches are known to have a lot of signals for the future of monetary policy and could therefore cause some volatility in the pair.

Investors will also pay attention to the US housing sector data released today. New home sales are expected to drop from 591K to 588K in May. A higher-than-expected value could push AUD/USD lower, while a lower-than-expected value could push the pair higher.

AUD/USD price technical analysis: Bears attempting a break below 0.68527

Looking at the 4-hour chart, we see the price in a downtrend. It is trading below the 30-SMA, and the RSI is trading below 50, favoring bearish momentum. For this bearish trend to continue, bears need to push the price below the recent swing low at 0.68527, thereby creating a lower low.

-Are you interested in learning about forex signals? Click here for details-

It is, however, also possible that bears are unable to break this horizontal support. If that is the case, we could see bulls pushing the price above the 30-SMA toward 0.70500, which has acted as resistance previously.

Looking to trade forex now? Invest at eToro!

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money