AUD/USD fails to take advantage of USD weakness, looks to post daily losses near 0.7170

• Risk-off mood weighs on the AUD on Monday.
• Greenback extends slide for the second straight day.
• Coming up: National Australia Bank’s business sentiment report.

After touching a 10-day high above 0.72 earlier in the day, the AUD/USD reversed its course and fell into the negative territory in the NA session despite the broad-based USD weakness. As of writing, the pair was down 0.24% on the day at 0.7167.

With investors pricing a dovish FOMC statement following last week’s reports about the Fed possibly ending its balance sheet reduction scheme earlier than initially planned, the greenback struggled to find demand on Monday. The US Dollar Index, which tracks the greenback against a basket of six major currencies, slumped to a 13-day low of 95.64 earlier in the session and was last seen down 0.13% on a daily basis at 95.68.

However, resurfacing fears about the economic slowdown in China after Caterpillar said that the company’s disappointing fourth-quarter revenue figures were due to weak demand from China weighed on the AUD. Additionally, heavy losses seen in major global equity indexes on Monday put additional weigh on the risk-sensitive AUD’s shoulders.  

In the early hours of the Asian session, National Australia Bank will publish its business sentiment report, which will include Business Conditions and Business Confidence indexes.

Key technical levels