AUD/USD Price Analysis: Bears flirt with two-year low, break below 0.6700 mark awaited

• AUD/USD came under renewed selling pressure on Thursday and dropped to a fresh two-year low.
• A fresh wave of the USD buying and the risk-off mood exerting pressure on the risk-sensitive aussie.
• The formation of a descending channel supports prospects for an extension of the depreciating move.

The AUD/USD pair struggled to capitalize on the upbeat Australian jobs data-inspired modest gains and witnessed a turnaround from the 0.6800 neighbourhood on Thursday. The downward trajectory dragged spot prices to the lowest level since June 2020, with bears still awaiting a sustained break below the 0.6700 round figure.

The US dollar resumed its relentless rise and climbed to a fresh two-decade high, which, in turn, was seen as a key factor that acted as a headwind for the AUD/USD pair. Apart from this, a fresh bout of intense selling around the equity markets underpinned the safe-haven buck and weighed on the risk-sensitive aussie.

From a technical perspective, the emergence of fresh selling at higher levels and sustained weakness below the 0.6700 mark would be seen as a fresh trigger for bearish traders. The negative outlook is reinforced by the fact that the AUD/USD pair has been trending lower along a four-week-old downward-sloping channel.

Furthermore, oscillators on the daily chart are holding deep in the bearish territory and are still far from being in the oversold zone. The set-up remains titled firmly in favour of bearish traders and supports prospects for a slide towards challenging the lower end of the descending channel, near the 0.6665-0.6660 area.

The latter should act as a strong base for spot prices, which if broken decisively should pave the way for an extension of the near-term downward trajectory. The AUD/USD pair might then accelerate the fall towards and challenge the 0.6600 round-figure mark before eventually dropping to the 0.6570 horizontal support zone.

On the flip side, the 0.6190-0.6210 region now seems to have emerged as an immediate strong barrier. Any subsequent move up might still be seen as a selling opportunity and remain capped near the 0.6850-0.6860 confluence, comprising 100-period SMA on the 4-hour chart and the top end of the aforementioned descending channel.

AUD/USD 4-hour chart

Key levels to watch