“¢ US-China trade tensions kept a lid on the early uptick led by upbeat Aussie data.
“¢ Surging US bond yields underpin USD and exert additional downward pressure.
“¢ Positive copper prices did little to support, albeit might help limit deeper losses.
After an initial uptick to the 0.7100 neighbourhood, the AUD/USD pair met with a fresh supply and has now drifted into negative territory for the fifth session in the previous six.
The pair initially got a minor lift from NAB Business Confidence index, coming in at 6 for September as compared to an upwardly revised reading of 5 in the previous month, and touched a three-day high level of 0.7094.
The uptick quickly ran out of steam, with a combination of negative forces exerting some downward pressure over the past few hours and eroding a part of overnight goodish rebound from 32-month lows.
A fresh leg of an upsurge in the US Treasury bond yields assisted the US Dollar to build on previous session’s goodish up-move. This, against the backdrop of escalating US-China trade tensions, turned out to be one of the key factors prompting some selling around the China-proxy Australian Dollar.
Adding to this, the prevalent cautious mood across global equity markets was seen benefitting the greenback’s relative safe-haven status against its Australian counterpart and helped offset a positive trading sentiment around copper prices, which tend to underpin demand for the commodity-linked Australian Dollar.
In absence of any major market moving economic releases, the USD price dynamics and the broader market risk sentiment might continue to act as key determinants of the pair’s momentum through Tuesday’s trading session.
Technical levels to watch
Immediate support is pegged near the 0.7055 level and is closely followed by multi-month lows, around the 0.7040 region, below which the pair is likely to accelerate the fall towards the key 0.70 psychological mark. On the flip side, the 0.7095-0.7100 region might continue to act as an immediate resistance, which if cleared might trigger a short-covering bounce and lift the pair further towards the 0.7145-50 supply zone.
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