AUD/USD accelerates slide, hits fresh one-week lows below 0.6650
|- Australian Dollar under pressure due to risk aversion and lower commodity prices.
- US Dollar extends weekly gains despite weaker-than-expected US Consumer Sentiment data.
- The AUD/USD has lost another key support level after falling below 0.6680.
The AUD/USD accelerated to the downside after Wall Street's opening bell, as the US dollar strengthened and equity and commodity prices declined. The pair dropped to 0.6650, the lowest level in more than a week.
US data
The US Import and Export Price Index declined as expected, but less than forecast. The significant decrease in annual rates will help bring inflation closer to the Federal Reserve's target.
A separate report showed that the University of Michigan's Consumer Sentiment Index fell to 57.7 in May from 63 in April, below the 63.5 expected by market consensus.
The US Dollar briefly weakened after the Consumer Sentiment data, only to regain strength. The Greenback is trading at daily highs across the board, extending its weekly gains, supported by risk aversion. Commodity prices are weakening again, adding pressure to the Australian Dollar.
Extending the reversal
The AUD/USD peaked during the week at 0.6817, the highest level since February, before reversing its course. Over the last two days, it has lost more than a hundred pips, slipping below the 20-day Simple Moving Average (SMA).
On Friday, it broke below the 0.6680 support area. The next relevant support zone is around 0.6635; below this, attention will turn to 0.6600. To alleviate the bearish pressure, the Aussie needs to regain 0.6680 initially.
Next week's US data includes Retail Sales on Tuesday. In Australia, it will be a busy week with the release of the Reserve Bank of Australia minutes (Tuesday), the Wage Price Index (Wednesday) and Employment Change (Thursday).
Technical levels
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