AUD/USD bears back in control, hammered down to mid-0.7400s
| • Already strong USD gets an additional boost from surging US bond yields.
• A slump in commodity space does little to ease the bearish pressure.
The AUD/USD pair remained heavily offered on Tuesday and tumbled back below the 0.7500 handle during the early NA session.
The already strong US Dollar got an additional boost following the release of upbeat Empire State manufacturing index and an upward revision to March's monthly retail sales figures, which largely offset slightly softer data for April.
Adding to this, the ongoing upsurge in the US Treasury bond yields, with 10Y hitting its highest level since July 2011, further aggravated the selling pressure around higher-yielding currencies - like the Aussie.
Meanwhile, the prevalent negative trading sentiment around commodity space, especially copper, also did little to lend any support to the commodity-linked Australian Dollar and stall the pair's slump back closer to mid-0.7400s.
Moreover, possibilities of some trading stops being triggered below the key 0.7500 psychological mark could also be one of the factors contributing to the pair's sharp fall of around 50-pips over the past couple of hours.
It would now be interesting to see if the pair is able to find any buying interest at lower levels or some fresh technical selling keeps exerting downward pressure through the NY trading session.
Technical outlook
Valeria Bednarik, FXStreet's own Chief Analyst writes: “The pair is strongly bearish short-term and according to the 4 hours chart, accelerating south after breaking below the 23.6% retracement of its latest weekly decline. It's also developing below the 20 and 100 SMA, both around 0.7530, while technical indicators accelerated south well into negative territory.”
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