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AUD/USD drops to 1-1/2 week lows, around mid-0.6800s

  • AUD/USD comes under some renewed selling pressure on Tuesday.
  • Softer risk sentiment weighed on riskier currencies – like the aussie.
  • Bears now eye some follow-through weakness below 0.6850 support.

The AUD/USD pair edged lower through the early European session on Tuesday and dropped to near two-week lows, around mid-0.6800s in the last hour.

Following the previous session's directionless move and a subsequent uptick earlier this Tuesday, the pair once again met with some fresh supply near the very important 200-day SMA and turned negative for the fourth consecutive session.

Aussie weighed down by weaker risk sentiment

A turnaround in the global risk sentiment – led by concerns of the corona-virus outbreak in China – was seen as one of the key factors driving flows away from perceived riskier currencies, including the aussie, and exerted some pressure on the major.

On the other hand, the US dollar consolidated its recent gains to monthly tops and did little to influence the price action. The greenback remained well supported by diminishing odds of any further interest rate cuts by the Fed.

The pair was last seen hovering around last week's swing lows support near the 0.6860-50 region, which if broken might be seen as a key trigger for bearish traders and pave the way for a further near-term depreciating move.

There isn't any major market-moving economic data due for release on Tuesday from the US. Hence, the broader market risk sentiment might continue to play a key role in influencing the momentum and produce some meaningful trading opportunities.

Technical levels to watch

 

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