AUD/USD drops as market sentiment falters, approaching support at 0.6640

• The Aussie is under growing bearish pressure amid a deteriorating market mood.
• The PBoC decision to keep interest rates on hold has increased negative pressure on the Aussie.
• Below 0.6640, the next target is the 0.6520/40 area.
   

The Australian Dollar is accelerating its reversal from Friday’s highs during the European morning session. The sourer market sentiment, with European equity markets turning red after a positive opening, is providing support to the safe-haven US Dollar, and increasing Aussie’s weakness.

The calendar is light today, with US markets closed for the Martin Luther King bank holidays, which results in choppy and volatile trading. Later this week, the US Retail Sales

Upbeat Australian data has failed to support the AUD

In Australia, higher TD Securities Inflation data suggests higher price pressures in the coming months. Furthermore, job advertisements increased in December, following three consecutive declines. These figures, however, have failed to provide any significant support to the Aussie.

Earlier today, the People’s Bank of China left its benchmark rate unchanged, disappointing investors who expected a rate cut to support the country’s stuttering economic recovery.

In this context, the China-proxy AUD is under increasing bearish pressure, with bears aiming for a key support area at 0.6640. Below here, the next target would be the 0.6520/40 area. Resistances are 0.6735 and 0.6760.

Technical levels to watch