AUD/USD languishes near its lowest level since June 30, eyes mid-0.6400s ahead of US data – Crypto News – Crypto News
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AUD/USD hangs near one-month low, just above mid-0.6800s amid bullish USD AUD/USD hangs near one-month low, just above mid-0.6800s amid bullish USD

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AUD/USD languishes near its lowest level since June 30, eyes mid-0.6400s ahead of US data – Crypto News

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  • AUD/USD turns lower for the sixth straight day and slides back closer to the YTD low.
  • China’s economic woes continue to exert pressure on the Aussie amid a bullish USD.
  • Bets for one more Fed rate hike push US bond yields higher and underpin the buck.

The AUD/USD pair fades an intraday bullish spike to the 0.6520 region and retreats to the lower end of its daily range during the early part of the European session on Tuesday. Spot prices currently trade around the 0.6470 area, down for the sixth straight day and well within the striking distance of the YTD trough touched on Monday.

The initial market reaction to a surprise rate cut by the People’s Bank of China (PBoC) fizzles out rather quickly on the back of concerns that China’s post-pandemic recovery has slowed after a brisk start in the first quarter. The fears were further fueled by another round of disappointing macro data from China – including Retail Sales, Industrial Production, Fixed Asset Investment and the urban unemployment rate. This, in turn, undermines the China-proxy Australian Dollar (AUD), which, along with the underlying bullish sentiment surrounding the US Dollar (USD), continues to exert some downward pressure on the AUD/USD pair.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, trades just below its highest level in more than two months and remains supported by expectations that the Federal Reserve (Fed) will stick to its hawkish stance. The outlook pushes the yield on the benchmark 10-year US government bond to a nine-month peak and supports prospects for a further near-term appreciating move for the buck. The Aussie bulls, meanwhile, seem unimpressed by the Reserve Bank of Australia’s (RBA) August meeting minutes, which showed that policymakers saw a “credible path” back to the inflation target with the current cash rates at 4.1%.

The aforementioned fundamental backdrop, along with a confirmed bearish double-top breakdown, suggests that the path of least resistance for the AUD/USD pair is to the downside. Some follow-through selling below mid-0.6400s, or the lowest level since November 2022 set the previous day, will reaffirm the negative bias and pave the way for an extension of a one-month-old downtrend. Traders now look to the US economic docket, featuring monthly Retail Sales and the Empire State Manufacturing Index, later during the early North American session. Apart from this, the broader risk should provide a fresh impetus to the major.

Technical levels to watch

 

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