- AUD/USD turns lower for the third straight day, though the downside seems cushioned.
- China’s economic woes turn out to be a key factor undermining the risk-sensitive Aussie.
- Hope for more stimulus from China and a bearish USD should limit losses for the major.
The AUD/USD pair attracts some sellers following an intraday uptick to the 0.6835 region on Tuesday and drifts into negative territory for the third successive day. Spot prices drop to a fresh daily low during the early European session and currently trade just above the 0.6800 round-figure mark.
Despite the hawkish minutes of the July Reserve Bank of Australia (RBA) policy meeting, the Australian Dollar (AUD) struggles to gain any meaningful traction in the wake of concerns over slowing economic growth in China. It is worth recalling that data released on Monday showed that the economic growth in China decelerated substantially in the second quarter and Retail sales - a gauge of consumption - slowed sharply in June. This, in turn, is seen as a key factor weighing on the China-proxy Aussie, though the possibility of more stimulus measures from China could limit losses for the AUD/USD pair.
The National Development and Reform Commission (NDRC) - China's top economic planner - pledged that it would roll out policies to restore and expand consumption without delay as consumers' purchasing power remained weak. Apart from this, the bearish sentiment surrounding the US Dollar (USD) warrants some caution before placing aggressive bearish bets around the AUD/USD pair. In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near its lowest level since April 2022 in the wake of expectations of a less hawkish Federal Reserve (Fed).
Market participants seem convinced that the US central bank will end its policy-tightening campaign and keep interest rates steady for the rest of the year following the largely priced-in 25 bps lift-off in July. This, in turn, keeps the USD bulls on the defensive and makes it prudent to wait for strong follow-through selling to confirm that the AUD/USD pair has formed a bearish double-top pattern near the 0.6900 mark. Market participants now look forward to the US economic docket - featuring the release of monthly Retail Sales and Industrial Production figures - for short-term trading opportunities.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD bounces off lows, retests 1.1370
Following an early drop to the vicinity of 1.1310, EUR/USD now manages to regain pace and retargets the 1.1370-1.1380 band on the back of a tepid knee-jerk in the US Dollar, always amid growing optimism over a potential de-escalation in the US-China trade war.
GBP/USD consolidates losses near 1.3300 after UK Retail Sales data
GBP/USD remains under moderate selling pressure near 1.3300 despite the upbeat UK Retail Sales data for March. The pair feels the heat of the solid US Dollar rebound, aided by latest headlines hinting at a softening rhetoric in the ongoing US-China trade conflict.
Gold drops toward $3,250 as market mood improves
Gold turns south following Thursday's rebound and declines toward $3,250 on Friday. The bearish pressure builds up as market mood improves on growing optimism about a de-escalation of the US-China trade conflict after US President Trump hinted at the beginning of negotiations.
Ethereum: Accumulation addresses grab 1.11 million ETH as bullish momentum rises
Ethereum saw a 1% decline on Friday as sellers dominated exchange activity in the past 24 hours. Despite the recent selling, increased inflows into accumulation addresses and declining net taker volume show a gradual return of bullish momentum.
Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.