The Australian dollar is under pressure for a third straight session, with AUD/USD trading around 0.7130 during Asian hours on Monday โ remaining firmly below the 0.7150 resistance level that has capped recent recovery attempts.
The move lower follows the release of key economic data out of China, Australia’s largest trading partner. While the specific data points were not detailed in the source, weaker-than-expected Chinese figures typically signal softer demand for Australian commodity exports, including iron ore and coal โ both of which are critical drivers of the Aussie dollar’s valuation.
Why This Matters for Australian Traders
For traders holding AUD-denominated accounts or running long AUD/USD positions, three consecutive days of selling pressure is a meaningful signal. The pair has now failed to hold above 0.7150, a level that had been watched as near-term support-turned-resistance.
Australia’s economic fortunes remain closely tied to Chinese activity. Any slowdown in Chinese industrial output, retail spending, or fixed asset investment tends to weigh directly on AUD/USD, as it reduces the outlook for Australian export revenue and trade surpluses.
What to Watch Next
Traders should monitor any follow-through in Chinese economic commentary or further data releases this week, which could reinforce or reverse the current downward bias. On the domestic front, watch for any RBA-related commentary that could shift rate expectations and provide a short-term catalyst for AUD.
The immediate level to watch is 0.7100 as the next meaningful support below current price. A break and close beneath that level would extend the bearish sequence and open the door to further downside. A reclaim of 0.7150 on the other hand would signal stabilisation.
Directional bias: Bearish near-term. The combination of consecutive session losses and soft China data keeps the path of least resistance to the downside until a clear reversal catalyst emerges.
Source: FX Street