AUD/USD sinks to fresh low level in two-years, below 0.6750

• On Monday, the AUD/USD nosedives mainly on risk-aversion spurred by China’s Covid-19 resurgence.
• US economic data and Fed speakers to remain in the driver’s seat throughout the week; US inflation and consumer sentiment watched.
• AUD/USD Price Analysis: Tilted to the downside, and a break below 0.6700, would expose May 2020 swing lows in the 0.6400-0.6600 area.

The AUD/USD is plunging in the North American session, in which the major reached a daily high of around 0.6854, diving to fresh two-year lows under 0.6730s, amidst China’s coronavirus reemergence, recession fears, and risk aversion.

The AUD/USD is trading at 0.6744, down almost 1.80%, slightly up from the daily lows at 0.6714, in the mid-0.6730-40s. in the meantime, the US Dollar Index, a gauge of the buck’s value vs. six currencies remains trading at 20-year highs around

AUD/USD tanks on safe-haven plays, falling commodity prices

The sentiment is downbeat as global equities fall. The AUD/USD stays on the defensive, adrift to investors’ mood, amidst the lack of economic data. In the week, the US economic calendar will be busy reporting that US inflation – consumer and producer based – is expected to rise. After that, US Retail Sales are expected to be higher, while the University of Michigan Consumer Sentiment could be in the spotlight after June’s figures triggered a market shift and weighed on the Federal Reserve rate hike decision. Meanwhile, money market futures odds of a Fed's 75 bps rate hikes are fully priced in at a 99% chance.

In the case of Australia, the Aussie remains heavy also on lower commodity prices. The Iron Ore price is down 1.22%, at 113.74 a ton, contrarily to the Bloomberg Commodity Index, up by a decent 0.22%. With the Reserve Bank of Australia (RBA) decision in the rearview mirror, the Australian economic docket will feature June’s Business and Consumer Confidence, alongside employment data.

Newswires reported that Kansas City Esther George crossed wires. She said that the speed of rates should be questioned, adding that raising rates too fast risks “oversteering.”

AUD/USD Price Analysis: Technical outlook

The AUD/USD daily chart depicts the pair as downward biased. Confirmation of the previously mentioned is the exchange rate below 0.7000, the daily moving averages (DMAs) above the spot price, and the Relative Strength Index (RSI) in bearish territory, crossing below the RSI’s 7-day SMA, a sell signal.

That said, the AUD/USD first support would be May 27, 2020, high at 0.6680. Break below will expose May 22, 2020, low at 0.6505, followed by May 15, 2020, daily low at 0.6402.