AUD/USD attacks 0.6700 amid a massive 1.50% sell off

• AUD/USD is attempting a dead cat bounce above 0.6700.
• The US Dollar demand remains unabated despite the risk rally.
• The Aussie pair awaits the US Manufacturing data for some respite.

AUD/USD is seeing a tepid bounce from one-week lows of 0.6695 but bulls remain cautious above the 0.6700 barrier. The US Dollar is holding the upper hand across the FX board so far this Tuesday, as investors look for solace in the greenback on the first trading day of the year.

China’s covid concerns, high inflation and risks of an imminent recession worldwide have continued to sap investors’ confidence. Markets could be creating fresh US Dollar positions to fend off those risks while gearing up for a fresh economic release from the US later this Tuesday. The US S&P Global Manufacturing PMI will be published in the American session alongside a few minority reports.

Meanwhile, the Aussie fails to capitalize on the risk flows and upbear Chinese Caixin Manufacturing PMI data, as the US Dollar strength remains the main market driver, thus far. China's Caixin Manufacturing PMI for December dropped to 49.0 vs. 48.8 expected and 49.4 previous.

AUD/USD: Technical levels to consider