AUD/USD weakens amid risk aversion, falls to the 0.6910 area
- US: CB Consumer sentiment falls to a 16-month low.
- Stocks turned lower, main indexes fall by 1% on average.
- AUD/USD falls from six-day highs toward 0.6900.
US stocks turned to the downside on Tuesday and boosted the US dollar. The AUD/USD dropped to 0.6909, hitting a fresh daily low. It remains under 0.6930 with a bearish intraday bias. Earlier it climbed to a six-day high of 0.6964.
Since last Friday, AUD/USD is moving sideways between 0.6910 and 0.6960 with a modest bullish bias. Still unable to move significantly away from the 2-year low at 0.6823 it reached during May.
Risk-off weighs on AUD
The AUD/USD found support so far on Tuesday above the support area of 0.6905/10. A break lower could trigger more losses; the next strong support stands at 0.6870, around last week’s low. On the upside the immediate resistance could be seen at the 20-hour Simple Moving Average at 0.6930.
Stocks erased earlier gains. The S&P 500 is falling by 1.07%. The decline in Consumer Sentiment weighed on sentiment. Conference Board’s index dropped to the lowest level in 16 months in June amid rising inflation and a negative growth outlook.
On Wednesday, retail sales data is due in Australia at 01:30 GMT (market consensus: 0.4%). Analysts at TD Securities see a 0.5% increase. “A strong retail beat will strengthen the case for another aggressive move by the RBA (Reserve Bank of Australia) in July after their outsized 50bps hike this month.”
Technical levels