AUD/USD Breakdown Risk Rising as Bears Test 0.6550 Support

AUD/USD faces mounting downside pressure as the pair trades below key technical levels, according to UOB. After breaching 0.6600, the psychological support, AUD/USD failed to find support near the 100-day moving average around 0.6580. The market is now testing 0.6550, a 61.8% Fibonacci retracement from the March rally. UOB flags bearish momentum but not full capitulation yet: RSI is around 38 (bearish, not oversold), while MACD histogram remains negative below its signal line. The 20-day moving average crossing below the 50-day moving average forms a potential “death cross”, typically a bearish regime change. Fundamentals also lean against AUD/USD. The RBA remains cautious amid concerns over domestic consumption and global headwinds, while the US Federal Reserve appears more patient on rate cuts, supporting the USD through widening interest-rate differentials. Commodity signals are mixed: iron ore holds up on China stimulus, but pricing pressure persists for coal and LNG. Australia’s trade surplus narrowed last week, weakening a traditional AUD support pillar. Positioning is turning more defensive. COT data shows leveraged funds cut net long AUD exposure by about 35% over three weeks, the biggest unwind since January. Options demand for downside protection is rising, with the 1-month risk reversal skew turning more negative. UOB notes a historical pattern: when AUD/USD breaks below both the 100-day moving average and 0.6600 simultaneously, the one-month return averages -1.5% with a 70% chance of further decline. However, about 30% of breakdowns are false and can snap back. Traders should watch whether AUD/USD can hold the 0.6550–0.6500 zone or confirms a daily-close breakdown with follow-through below 0.6500.