AUD/USD struggles near one-month lows, just below 0.7200 mark
|- AUD/USD remained under some selling pressure for the third consecutive session on Tuesday.
- The downbeat market mood benefitted the USD’s safe-haven status and exerted some pressure.
- The aussie dollar was further weighed down by not so optimistic remarks by RBA's Debelle.
The AUD/USD pair weakened back below the 0.7200 round-figure mark and dropped to near one-month lows during the early European session.
The pair added to its previous day's heavy losses and witnessed some follow-through selling for the third consecutive session on Tuesday. Renewed coronavirus jitters and fears of fresh lockdown measures to curb the second wave of the outbreak continued weighing on investors' sentiment. The anti-risk flow benefitted the US dollar's relative safe-haven status and exerted some pressure on the AUD/USD pair.
The Australian dollar was further weighed down by the RBA Deputy Governor Guy Debelle's comments that a lower exchange rate would definitely be beneficial for the economy. Debelle further added that the economy is currently seeing a gradual and uneven recovery. Debelle, however, noted that the aussie dollar is broadly aligned with fundamentals and intervention may not be effective.
Meanwhile, the USD bulls now seemed to have turned cautious amid expectations that the Fed Chair Jerome Powell will reaffirm to keep interest rates lower for longer during his congressional testimony later this Tuesday. This makes it prudent to wait for some follow-through selling before positioning for an extension of the recent pullback from YTD tops – levels just above the 0.7400 mark.
Market participants now look forward to the US economic docket, featuring the release of Existing Home Sales and Richmond Manufacturing Index. The data might influence the USD price dynamics, which, along with the broader market risk sentiment will assist traders to grab some short-term opportunities.
Technical levels to watch
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