Overnight Performance

The AUD/USD pair traded in a narrow range of 0.6646 to 0.6621 overnight. As New York markets opened, the pair was near 0.6628, reflecting a slight decline of -0.23%. Despite declines in U.S. yields and USD/CNH, as well as gains in equity markets, the AUD/USD pair still fell.

Commodities and Cross-Currency Influence

Several factors contributed to the pair’s bearish movement. Drops in key commodities such as iron ore and copper, coupled with the AUD/JPY falling below 130.25, exerted downward pressure on the AUD/USD. These factors collectively pushed the pair near a one-month low, maintaining a bearish technical outlook.

Technical Analysis

From a technical perspective, the pair held below the daily cloud top and breached the 38.2% Fibonacci retracement level of the 0.63625 to 0.67985 range. The falling Relative Strength Index (RSI) and July’s monthly inverted hammer candle further reinforce the bearish signals, suggesting that the downtrend may continue.

Economic Data Risks

Looking ahead, the Richmond Fed’s July survey of service and manufacturing activity poses a risk for the AUD/USD in New York trading. Additionally, U.S. June existing home sales data, set to be released in the morning, could also impact the pair.

Upcoming Economic Indicators

Wednesday brings numerous national July Purchasing Managers’ Index (PMI) reports, which may significantly influence risk sentiment and, consequently, the AUD/USD pair. Traders should closely monitor these reports for further direction.

The AUD/USD remains under pressure due to weaker commodities, technical bearish signals, and looming economic data risks. Traders should stay vigilant as upcoming reports and indicators may further impact the pair’s performance.