- RBA rate cut speculations continue to weigh on the Australian Dollar.
- Trump’s not so optimistic trade-related comments add to the selling bias.
- Traders now eye US economic docket for some short-term opportunities.
The AUD/USD pair finally seems to have found acceptance below the 0.6900 handle and dropped to fresh six-week lows in the last hour.
The pair witnessed some renewed selling since the early European session on Tuesday and finally broke down of its two-day-old consolidative trading range to extend its recent sharp pullback from near three-month tops.
Against the backdrop of RBA rate cut speculation, the China-proxy Australian Dollar was further weighed down by the US President Donald Trump’s not so optimistic trade-related comments in the last hour.
Adding to this, a slight deterioration in the global risk sentiment – as depicted by a sharp intraday slide in equities, benefitted the US Dollar’s relative safe-haven status against perceived riskier currencies – like the Aussie.
Meanwhile, further downside seems more likely to remain limited as investors might refrain from placing aggressive bets ahead of the highly anticipated FOMC policy decision, scheduled to be announced on Wednesday.
However, any trade-related headlines coming out of the high-level trade negotiations between the world’s two largest economies might continue to influence the broader market risk sentiment and provide some meaningful impetus.
Moving ahead, Tuesday’s US economic docket – highlighting the release of core PCE price index and the Conference Board’s Consumer Confidence Index, might help traders to grab some short-term trading opportunities.
Technical levels to watch
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