AUD/USD: Bears eye 0.7250 amid poor Australian Retail Sales, escalating covid woes

AUD/USD looks to retest eight-month lows below 0.7300.
Australian Delta covid crisis intensifies, Retail Sales disappoint.
DXY catches a fresh bid in Asia, as sentiment sours once again.

Dhwani Mehta FXStreet

The selling interest remains unabated around AUD/USD for the fifth straight day on Wednesday, as the bears eye deeper losses below 0.7300.

The aussie printed eight-month lows of 0.7297 a day before and now remains poised to attack it, as the risk sentiment turns sour once again amid escalating Delta covid variant concerns in the Asia-pac region, with Australia and Indonesia badly hit.

Australia’s largest city, Sydney, reported a 40% jump in the covid cases over the past 24 hours while Victoria reported a daily case number today at 22 from 13 seen on Tuesday. The country’s two most populous states are under renewed lockdown restrictions, thanks to the rapid spread of this variant.

Adding to the aussie’s misery, the nation’s Retail Sales dropped by 1.8% in June vs. -0.5% expected. The decrease in consumer spending already hints at the negative effects of the covid lockdowns on the Australian economy.

The latest Reuters poll of economists reveal that the South Pacific Island Nation’s “growth is now forecast at 0.1% on a quarter-on-quarter basis compared with 0.9% predicted in an April poll,” in light of the extended lockdowns and slow vaccination.

Amidst global growth concerns and inflation overheating fears, the demand for the US dollar is on revival in Asia, exerting additional downward pressure on the aussie.

Further, ongoing US-Sino tensions also keep the aussie bulls at bay. Amongst the latest headlines, US Deputy State Secretary said that America will continue engaging with Chinese officials.

This comes a day after the US, Europe, Japan and others on Monday accused China of a "pattern of malicious cyber activity," linking Beijing to an attack on Microsoft Exchange email servers discovered in March.

The pair now await fresh covid updates and sentiment in Europe for a fresh trading impetus. However, the risks remain skewed to the downside for the aussie should the market mood worsen going forward.

AUD/USD technical levels to watch

AUD/USD

Overview
Today last price	0.7303
Today Daily Change	-0.0026
Today Daily Change %	-0.35
Today daily open	0.733

Trends
Daily SMA20	0.7483
Daily SMA50	0.7616
Daily SMA100	0.7664
Daily SMA200	0.7588

Levels
Previous Daily High	0.7357
Previous Daily Low	0.7299
Previous Weekly High	0.7504
Previous Weekly Low	0.7391
Previous Monthly High	0.7794
Previous Monthly Low	0.7477
Daily Fibonacci 38.2%	0.7321
Daily Fibonacci 61.8%	0.7335
Daily Pivot Point S1	0.73
Daily Pivot Point S2	0.727
Daily Pivot Point S3	0.7242
Daily Pivot Point R1	0.7358
Daily Pivot Point R2	0.7387
Daily Pivot Point R3	0.7417

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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