AUD/USD Price Analysis: Defies two-month-old resistance breakout amid risk-off markets

• AUD/USD extends reversal from three-week high as blue wave hopes fade.
• 50-day SMA adds to the upside barrier, seven-day-old horizontal support challenge the bears.

Having initially rose to the highest since October 12, AUD/USD currently prints 0.68% intraday losses during the early Wednesday. The aussie pair recently dropped to 0.7048 before bouncing back to 0.7100 by press time.

Considering the increasing challenges to the Democrats, as portrayed by Smarkets’ forecast of 65% chances for President Donald Trump’s victory, global markets turn risk-off.

Check live updates: Four more years for Trump or a victory for Biden? – Live coverage

As a result, the US dollar index (DXY) reverses the current week’s fall with a heavy rise probing the late September tops above 94.00.

The USD moves also weigh on the AUD/USD prices that defy the early-Asian break out of a falling trend line from September 01, at 0.7141 now. The reversal could also be attributed to the pair’s inability to cross 50-day SMA, currently around 0.7180.

On the downside, an area including lows marked since September 25, near 0.7000-0.6990, offers strong support.

AUD/USD daily chart

Trend: Pullback expected