Search ForexCrunch
  • The pair losses further momentum and falls to 0.7150.
  • US-China trade talks remain a key driver around AUD.
  • AU New Home Sales, Capex, manufacturing PMI next in the docket.

The Aussie Dollar comes under further downside pressure on Wednesday and is now dragging AUD/USD to fresh daily lows in the vicinity of 0.7150.

AUD/USD upside capped by 0.7200

After another failed attempt to test/surpass the critical barrier at 0.7200 the figure, or weekly peaks, the pair run out of steam and motivated sellers to turn up and impose the bearish mood.

In the meantime, the recent rebound in AUD from last week’s lows has been on the back of an improved sentiment in the riskier assets, always in tandem with rising hopes over a potential agreement in the US-Sino trade negotiations.

Moving forward, the CapEx index, manufacturing PMI and New Home Sales are next of relevance in the Australian calendar, whereas the attention later today will be on the second testimony by Chief Powell at Capitoll Hill and key US data releases.

What to look for around AUD

The broad risk-appetite trends continue to drive the sentiment in the high-beta currencies and the commodity-bloc, always looking to headlines from the ongoing US-China trade negotiations. In the meantime, the recently confirmed neutral stance from the RBA plus the potential deterioration in domestic fundamentals has not only opened the door for further revisions lower in the economic outlook but it has also left a probable rate cut well on the table in the next months.

AUD/USD levels to watch

At the moment the pair is retreating 0.41% at 0.7152 facing the next support at 0.7069 (low Feb.21) seconded by 0.7054 (low Feb.12) and finally 0.7021 (monthly low Oct.21 2018). On the other hand, a breakout of 0.7206 (high Feb.21) would expose 0.7260 (200-day SMA) and then 0.7295 (high Jan.31).