AUD/USD Price Analysis: Refreshes two-year low at 0.6240 amid dismal market mood

• Negative market sentiment has trimmed the risk appetite of investors.
• Declining 20-and 50EMAs add to the downside filters.
• The RSI (14) is fulfilling the oversold conditions therefore, a pullback should be used for initiating shorts.

The AUD/USD pair has continued its seven-day losing streak by drifting below Tuesday’s low at 0.6247 in the Tokyo session. The asset has refreshed its two-year low at 0.6240 as the risk-off profile has soared amid firmer yields. The 10-year benchmark Treasury yields are playing around 3.95%. Also, the US dollar index (DXY) has refreshed its two-week high at around 113.60.

On the daily scale, the asset has delivered a vertical downside move after a south-side break of the consolidation formed in a 0.6369-0.6545 range. The breakdown of the consolidation results in volatility expansion, which brings heavy volume and wider ticks in the asset.

Declining 20-and 50-period Exponential Moving Averages (EMAs) at 0.6487 and 0.6661 add to the downside filters.

Adding to that, the Relative Strength Index (RSI) has shifted into the bearish range of 20.00-40.00, which indicates more weakness ahead. It is worth noting that the asset has been oscillating in the bearish range for the past month. Therefore, the odds of a pullback move are also heavy due to supporting oversold conditions.

It would be fruitful to use the pullback move toward September’s low at 0.6363 to initiate fresh shorts, which will drag the asset toward Wednesday’s low at 0.6240 followed by the round-level support at 0.6200.

On the flip side, a decisive break above October 4 high at 0.6548 will drive the asset toward the round-level resistance at 0.6600. A breach of the latter will expose the asset to smash the 50-EMA at 0.6661.

AUD/USD daily chart