AUD/USD remains depressed below mid-0.7000s

The AUD/USD pair ticked lower at the start of a new trading week and extended the previous session's intraday pullback from near three-month tops.

The pair stalled its recent upward trajectory and failed ahead of the very important 200-day SMA on Friday amid resurgent US Dollar demand, supported by the fact that St. Louis Fed President James Bullard ruled out the possibilities of 50 bps rate cut at the July meeting.

The USD gained some follow-through traction on Monday, which coupled with escalating geopolitical tensions in the Middle East - especially after Iran seized a British Oil tanker, further collaborated towards driving flows away from perceived riskier currencies - like the Aussie.

With traders still awaiting any update on the US-China trade negotiations, the China-proxy Australian Dollar remains at the mercy of USD price dynamics amid absent relevant market moving economic releases from the US and ahead of the upcoming FOMC meeting on July 30-31.

Technical outlook

As Valeria Bednarik, FXStreet's own American Chief Analyst writes – “The AUD/USD pair has room to continue advancing despite the latest pullback, as, in the daily chart, it settled above a bullish 20 DMA, also above the 100 DMA, while technical indicators hold into positive ground, although with uneven directional strength.”

“For the shorter term, and according to the 4 hours chart, the potential downward seems limited, as the intraday decline stalled above all of the moving averages, while technical indicators eased from overbought readings, the Momentum currently consolidating and the RSI heading lower but at around 55,” she added further.