- AUD/USD suffers from a lack of trade progress and uncertainty.
- Risk-off led by Hong Kong violence also undermines the Aussie.
- Focus shifts to Tuesday’s Australian data as US markets are closed on Monday.
The AUD/USD pair is seen flirting with the key support located near weekly lows of 0.6847, as bears remain in control amid a risk-off market profile.
Lower lows set up on daily sticks point to further losses
Markets remain cautious and refrain from placing any bets on the higher-yielding currencies such as the Aussie, in the face of a lack of certainty on the US-China trade deal, especially after the White House Adviser Navarro quoted the US President Trump, as saying that he didn’t agree to anything related to tariffs.
Adding to the downbeat tone around the Aussie, the risk-off trades are accelerated by the intensifying violence in Hong Kong after two protesters were shot by police amid ongoing demonstrations. Asian equities turned red on the Hong Kong political chaos, dragging the Wall Street futures lower alongside. Meanwhile, the US dollar continues to benefit from the safe-haven flows when compared to its main rivals. The USD index sits at three-week highs of 98.40, having formed a double bottom pattern on the daily sticks.
Also, looking at AUD/USD’s daily chart, a lower low set up can be observed, suggesting that further downside risks remain in play ahead of a data-heavy week. The focus now shifts towards the Australian NAB survey due on Tuesday amid an empty US docket, as the Americans celebrate their National holiday today.