AUD/USD drops to 2-week lows, closer to 0.6900 handle
- AUD/USD remains depressed for the fourth consecutive session on Tuesday.
- Improving global risk sentiment/trade optimism does little to lend any support.
- Market participants now look forward to the US ISM PMI for a fresh impetus.
The AUD/USD pair dropped to two-week lows in the last hour, albeit managed to find some support just ahead of the 0.6900 round figure mark
The pair extended its recent sharp pullback from over five-month tops – levels beyond the key 0.70 psychological mark – and remained under some selling pressure for the fourth consecutive session on Tuesday.
Bulls ignore a combination of supporting factors
The downfall seemed rather unaffected by improving global risk sentiment, which tends to benefit perceived riskier currencies – like the aussie. The market mood calmed a bit in the absence of any fresh threats from the US or Iran.
Meanwhile, the risk-on flows helped the US Treasury bond yields to build on the overnight late rebound, which extended some support to the US dollar and turned out to be one of the key factors dragging the pair lower.
This coupled with possibilities of some short-term trading stops being triggered on a sustained break below the 0.6930 horizontal support further collaborated to the pair's intraday downfall to the lowest level since December 24.
Despite the pullback, the China-proxy Australian dollar managed to find some support ahead of the very important 200-day SMA, around the 0.6900 handle, amid growing optimism over a possible phase one US-China trade deal.
Moving ahead, market participants now look forward to the release of the US ISM Non-Manufacturing PMI in order to grab some short-term trading opportunities later during the early North-American session on Tuesday.
Technical levels to watch