AUD/USD is likely to extend its bearish trend as Fed chief Powell's firm stance on U.S. rate hikes and troubles for China's currency present difficulties for the Aussie. Powell's congressional testimony gives the green light to U.S. dollar bulls looking to buy dips.
By reiterating the need for continued hikes, he bolstered the greenback's yield advantage over the Aussie dollar.
China's yuan, trade issues with the U.S. and slowing economy should keep AUD/USD bulls in-check as well.
The yuan hit a new trend low today and there are no signs the PBOC will step in to halt the slide.
Recent Chinese economic data show growth continuing to slow while China-U.S.
trade tensions continue to escalate nB9N1U401O.
Since the Aussie dollar remains a proxy for China, those factors are likely to help limit any gains for AUD/USD.
Technicals bolster a bearish view.
Consolidation of long-term losses persists and should resolve with a break lower while RSIs still provide bears a momentum tailwind.
The 0.7300/20 zone remains support but seems set to break.
Once broken, AUD/USD bears will put 0.7110/ support in their sights.
chart: Click here