AUD/USD drifts into negative territory for third straight session
• Follow-through USD recovery/US bond yields uptick prompts fresh selling.
• Weaker commodity prices add to the downward pressure.
• US consumer confidence data/Fedspeak to provide fresh impetus.
Having posted a session high near the 0.7615 region, the AUD/USD pair ran through some fresh offers and has now drifted into negative territory for the third consecutive session.
With the US Dollar building on overnight modest recovery move from 2-month lows, a follow-through uptick in the US Treasury bond yields seems to be one of the key factors prompting some fresh selling around higher-yielding currencies - like the Aussie.
The latest leg of downslide could also be attributed to some selling pressure around commodity space, especially copper, which tends to dent demand for the commodity-linked Australian Dollar.
The pair has now corrected over 50-pips from 2-week tops touched in the previous session and reemergence of selling pressure on every attempted move beyond the 0.7600 handle now seems to suggest that the near-term downward trajectory might still be far from being over.
Traders now look forward to the release of US CB consumer confidence index and speeches by influential FOMC members for some fresh impetus. Also in focus would be the Fed Chair Designate Jerome Powell's testimony before the Senate Committee and the US Treasury Secretary Steven Mnuchin's scheduled speech.
Technical levels to watch
"The 4 hours chart shows that the pair is gaining bearish traction, as in the 4 hours chart, the price broke below a bullish 20 SMA, while technical indicators entered bearish territory. The Momentum is actually neutral, but the RSI presents a bearish slope, favoring a bearish extension on a break below 0.7592" writes Valeria Bednarik, American Chief Analyst at FXStreet.