AUD/USD: Recent Strength Loses Momentum as Dollar Gains Ground

The AUD/USD currency pair is experiencing a loss of traction, with recent strength giving way to a four-day downtrend, leading to a renewal of the weekly bottom. As trading commences in Europe early on Wednesday morning, the pair slides to 0.6785, justifying the broad strength of the US Dollar while seemingly disregarding positive prints of Australia's Westpac Leading Index for June.

The Reserve Bank of Australia (RBA) minutes, released during the Asian session, indicated the potential necessity for further policy tightening. However, policymakers plan to reassess the situation at the upcoming August policy meeting, leaving room for speculation on future monetary actions.

Amid ongoing US-China headlines, China's defense minister, Li Shangfu, addressed US diplomat Henry Kissinger in Beijing, urging the exercise of sound strategic judgment in dealing with China. The market closely watches the developments in Sino-US relations, as they hold the potential to provide fresh impetus to the currency pair.

Looking ahead, market participants eagerly anticipate the release of Australia's Employment Change and Unemployment Rate data on Thursday. Additionally, cues from US Housing Starts and Unemployment Claims will also play a crucial role in shaping the direction of the AUD/USD pair. The impact of these data releases on the currency pair is expected to be significant, aiding in determining its future trajectory. Traders will closely monitor these economic indicators to make informed decisions and gauge potential opportunities in the AUD/USD market.

TurnAround Point: 0.6810

Our preference

Short positions below 0.6810 with targets at 0.6765 & 0.6750 in extension.

Trade closed: target reached: