AUD/USD plummets to 1-1/2 week lows ahead of US data
| • Fails to benefit from US politics-led renewed USD selling.
• A full-blown US-China trade war now denting sentiment.
• US economic data eyed for some fresh trading impetus.
The AUD/USD pair remained under heavy selling pressure through the mid-European session and has now dropped to fresh 1-1/2 week lows.
The pair's attempted Asian session recovery move faced rejection at the 0.7800 handle and the latest leg of the bearish slide could be attributed to some fresh long-unwinding pressure, especially after yesterday's bearish break back below the very important 200-day SMA.
The US President Donald Trump's plan to impose new tariffs on Chinese imports now seems to be one of the key factors denting sentiment surrounding the China-proxy Australian Dollar.
Meanwhile, persistent US Dollar selling bias, triggered by the latest US political turmoil, and a mildly positive tone around commodity space also did little to support the commodity-linked Aussie and stall the pair's sharp fall to 0.7760 area.
Next on tap would be the US economic docket, featuring the release of housing market data, industrial production figures and Prelim UoM Consumer Sentiment, and would be looked upon for some fresh trading impetus.
Technical levels to watch
A follow-through weakness below mid-0.7700s is likely to drag the pair further towards 0.7725-20 intermediate support en-route the 0.7700 handle. On the upside, any meaningful recovery attempts might now confront fresh supply near the 0.7800 handle, which if cleared might trigger a short-covering bounce back towards 0.7840-45 supply zone.
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