The AUD/USD currency pair finds itself under pressure...

The AUD/USD currency pair finds itself under pressure, gravitating towards the 0.6500 level, as it registers its first daily loss in four consecutive sessions. The morning hours of Tuesday in Europe witness the Aussie dollar facing a challenging environment. Despite a combination of Australian and Chinese data, the pair struggles to maintain its footing around the 0.6550 mark, as the US Dollar asserts its strength and keeps the bears in control.

Notably, China's headline Trade Balance exhibits an ascent to $80.6 billion, surpassing the projected $70.6 billion and the previous figure of $70.62 billion. Delving deeper into the numbers, a concerning aspect emerges as Imports record a sharp decline of -12.4% YoY, a stark contrast to the earlier -6.8% reading and the anticipated -5.0% forecast. Meanwhile, Exports also experience a downturn, contracting by -9.2% YoY from the previous -8.3%, and falling short of the expected -8.9%. This data disparity adds to the complexities surrounding the AUD/USD trajectory.

In addition to the intricate data dynamics, prevailing discussions regarding geopolitical uncertainties linked to China further contribute to the cautious sentiment gripping the market. The looming specter of Thursday's impending inflation indicators from both Australia and the US exerts its influence, acting as an additional weight on the AUD/USD exchange rate.

The landscape is also clouded by China's advisory on the utilization of facial recognition technology, which adds to the prevailing tensions. This, coupled with the ongoing friction between Japan and China and the persistent trade disputes between the US and China, collectively tinge the overall market sentiment. The sparse economic calendar and lackluster yield environment amplify these concerns.

TurnAround Point: 0.65600

Our preference

Short positions below 0.6560 with targets at 0.6505 & 0.64850 in extension.

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