- AUD/USD failed to capitalize on upbeat Chinese PMI-led early uptick to two-week tops.
- A goodish pickup in the US dollar demand turned out to be a key factor exerting pressure.
The AUD/USD pair extended its steady intraday pullback from two-week tops and weakened back below the 0.6100 round-figure mark during the mid-European session
The pair failed to capitalize on its early uptick to levels beyond the 0.6200 round-figure mark, rather met with some fresh supply and for now, seems to have snapped seven consecutive days of winning streak.
As investors looked past Tuesday’s upbeat Chinese PMI prints, a goodish pickup in the US dollar demand was seen as one of the key factors that prompted some renewed selling around the China-proxy aussie.
The greenback benefitted from its status as the global reserve currency amid concerns over an imminent global recession and got an additional boost from a positive tone around the US Treasury bond yields.
Meanwhile, the latest leg of the slide over the past few hours could further be attributed to an intraday pullback in the equity markets, which tend to weigh on the perceived riskier Australian dollar.
It will now be interesting to see if the pair is able to find any support at lower levels or the ongoing slide marks the end of the recent sharp recovery move from the 0.5500 neighourhood, or over 17-year lows.
Moving ahead, market participants now look forward to the US economic docket – highlighting the release of Chicago PMI and the Conference Board’s Consumer Confidence Index – for a fresh impetus.
Technical levels to watch