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  • Greenback up, everything else down as hawkish Fed teases faster, harder rate hikes.
  • Aussie Trade Balance today will mix poorly with low-volume markets with China still on holidays.

The AUD/USD has tumbled back into 2018 lows near the 0.7100 barrier as the US Dollar continues to rise against the majority of G10 currencies, fueled by rising interest rates and an increasingly hawkish US Federal Reserve.

The beleaguered has spent plenty of time on the mats, with Aussie bulls now used to getting pummeled against the broader markets as the Australian economy gives little reason to celebrate, slogging its way through the muck at a glacial pace, and US-China trade tensions have done little to ease things as Australia’s largest trading partner sees growing potential for an economic slowdown at the hands of tariffs.

With the Aussie consigned to a back seat in the markets, current  FX positioning is being largely decided by Greenback traders, who have seen fit to bid up the USD this week as rising interest rates from the US Fed, coupled with a strangely hawkish Fed chair Jerome Powell who is warning  of even further, faster rate hikes in the future, and while Asia-Pacific markets will be keeping an eye on Australia’s Trade Balance figures, due early Thursday at 01:30 GMT, the key event this week will be US Non-Farm Payrolls on Friday, where traders will be bracing for an expected cool-off in wage growth.

AUD/USD levels to watch

according to FXStreet’s own Valeria Bednarik: “the pair accelerated its decline after breaking below the 61.8% retracement of its September rally at around 0.7170 and seems poised to retest the yearly low at 0.7084, as the bearish momentum remains strong according to intraday technical readings. In the 4 hours chart, the 20 SMA accelerated its slump below the larger ones, now converging with the 50% retracement of the same rally at 0.7200, while technical indicators head south at oversold territory. Below the mentioned 0.7084, the pair has little in its way to 0.6826, the multi-year low set in early 2016.”

Support levels: 0.7085 0.7050 0.7010

Resistance levels: 0.7170 0.7200 0.7225