• A modest USD uptick keeps exerting some downward pressure for the fourth straight session.
• The downfall seemed rather unaffected by bullish commodity prices/US-China trade optimism.
• The focus shifts to Wednesday’s quarterly Aussie CPI figures and this week’s US macro data.
The AUD/USD pair dropped to near two-week lows during the early European session on Tuesday and might now be headed towards challenging the 0.7100 handle.
The pair extended last week's retracement slide from multi-week tops, levels just above the 0.7200 handle, and traded with a negative bias for the fourth consecutive session. Speculations that China might halt its stimulus measures partly offset growing optimism over a possible US-China trade deal and turned out to be one of the key factors weighing on the China-proxy Australian Dollar.
Traders even shrugged off bullish sentiment around commodity space, with bearish taking cues from a slight deterioration in risk sentiment. A mildly weaker tone surrounding equity markets was seen underpinning the US Dollar's relative safe-haven status against perceived riskier currencies - including the Aussie, and further collaborated to the pair's ongoing downfall.
Today's slide could further be attributed to some follow-through technical selling below 100-day SMA and hence, a follow-through weakness, back towards challenging the 0.7070-65 horizontal support, now looks a distinct possibility amid relatively thin US economic docket - featuring the release of new home sales data and Richmond Fed Manufacturing Index.
The key focus, however, will be on Wednesday's quarterly release of Aussie CPI figures, which coupled with important US macro data - including the advance GDP report on Friday, will play an important role in determining the pair's next leg of a directional move.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.