AUD/USD struggles near 1-week lows, bears eyeing a slide below 0.6800 handle

The AUD/USD pair dropped to over one-week lows on Tuesday, with bears now eyeing some follow-through weakness below 100-day SMA near the 0.6800 handle.

The pair failed to capitalize on its early uptick to the 0.6840-35 region and drifted into the negative territory for the second consecutive session on Tuesday. Persistent US-China trade uncertainty seemed to be one of the key factors weighing on the China-proxy Australian dollar.

It is worth recalling that the deadline for the next round of US tariffs on around $160 billion worth Chinese products is December 15. However, the Agriculture Secretary Sonny Perdue fueled some optimism on Monday and said that the US is unlikely to impose more tariffs.

Bulls, however, seemed rather unimpressed and took cues from a fresh wave of the global risk-aversion trade, which tends to drive flows away from perceived riskier currencies, including the aussie. Even the prevalent selling bias surrounding the US dollar also did little to lend any support.

It will now be interesting to see if the pair is able to attract any buying interest at lower levels or the current slide marks the resumption of the prior/well-established bearish trend amid absent relevant market moving economic releases from the US.

Meanwhile, the downside is likely to remain cushioned as investors might refrain from placing aggressive bets heading into this week’s key event risk, the highly anticipated FOMC monetary policy update, scheduled to be announced on Wednesday.

Technical levels to watch