AUD/USD trades under 0.78 amid the stock market sell-off

• US stock markets are selling off quite heavily, setting the tone for currency markets
• The AUD/USD is back down to low levels under 0.78

The AUD/USD is trading well under the 0.78 level, falling from the previous highs of 0.7829. 

US stock markets are down on all indices after initially opening at the slightly higher ground. The US dollar and the Japanese yen are taking advantage of the risk-off sentiment and the Australian dollar is losing ground. 

The S&P is around 2% down on the day amid high volatility and already down some 5% since the beginning of the year. This has been the dominating theme of the week, with significant falls on Monday and on Thursday.

AUD/USD technical levels

The next significant level on the downside is 0.7730 that capped the pair in November. Further down, 0.7650 capped the pair several times in December. The round 0.75 level is where the rally began.

On the topside, 0.7807 was the previous 2018 low and it was breached during this week. Higher, 0.7870 capped the pair in January. The round number of 0.80 looms above.