AUD/USD Price Analysis: Tests region below 0.6700 amid negative market sentiment

• AUD/USD has tested region below 0.6700 as the risk profile remains downbeat.
• The USD Index has refreshed its weekly high at 103.17 as the Fed is expected to raise interest rates further.
• AUD/USD has dropped to near the 50% Fibonacci retracement at 0.6680.

The AUD/USD pair has tested territory below the round-level support of 0.6700 for the first time in the past ten trading sessions. The Aussie asset has faced immense pressure as the market mood has turned quite risk-off due to fears of the global recession.

The US Dollar Index (DXY) is on the seventh cloud amid a risk-aversion theme. The USD Index has refreshed its weekly high at 103.17 as the Federal Reserve (Fed) is expected to raise interest rates further to achieve price stability.

Meanwhile, upbeat preliminary S&P PMI numbers have failed to support the Australian Dollar. Manufacturing PMI landed at 48.6, higher than the expectations of 48.1 and the former release of 48.4. Also, Services PMI at 50.7 outperformed expectations of 50.1 but remained lower than the former release of 52.1.

AUD/USD has dropped to near the 50% Fibonacci retracement (plotted from May 31 low at 0.6458 to June 16 high at 0.6900) at 0.6680 on a two-hour scale. Downward-sloping 20-period Exponential Moving Average (EMA) at 0.6743 indicates that the selling pressure is on Australian Dollar bulls.

The Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-60.00 from the bullish range in which the momentum oscillator would face selling pressure after a pullback to 60.00.

A decisive break below the 50% Fibo retracement at 0.6680 would expose the asset to 61.8% Fibo retracement at 0.6628 followed by June 05 low at 0.6579.

On the flip side, a confident break above the round-level resistance of 0.6800 would expose the asset to June 20 high at 0.6855. A break above the latter would drive the asset toward June 16 high at 0.6900.

AUD/USD two-hour chart