The AUD/USD pair was closed at 0.71487 after placing a high of 0.71838 and a low of 0.71399. Overall the movement of AUD/USD pair remained bearish throughout the day. The AUD/USD carried the previous day's bearish mood and extended its losses but found support at the 0.7140 level on Monday. The downward trend of AUD/USD could be associated with the strength of the US dollar and increased US-China tensions.
The US dollar was already strong due to Friday's upbeat employment data, and on Monday, the JOLTS job Openings data also supported it to find ground in the market. At 19:00 GMT, the US's data came in as 5.89M against the expected 5.30 M in June and supported the US dollar that weighed on AUD/USD pair.
On the other hand, the losses in the currency pair AUD/USD remained limited due to better than expected CPI data from China. The Chinese CPI for the year showed that Inflation in China rose to 2.7% in July from the anticipated 2.6% and the previous 2.5%.
It helped China-proxy Aussie gain some traction and limit further losses in AUD/USD pair on Monday. However, the risk sentiment was affected after the Defence Ministry of Taiwan reported that a Chinese jet crossed the median of the line of Taiwan Strait on Monday. It could escalate the tensions between US & China as the move from China was in response to US Health Secretary's visit to Taiwan. The faded risk sentiment weighed on the risk perceived Aussie, and hence, the AUD/USD pair continued its bearish move on the day.
Meanwhile, the coronavirus condition in Australia got worse as the local government recorded its deadliest day of the coronavirus pandemic on Monday after the state Victoria reported 19 deaths.
The second lockdown in Australia have been under implementation from 2 months, and the daily infection numbers have decreased in recent day, prompting hopes that a strict lockdown was working. However, the rate of infection was still in the hundreds. Australia's not-so-good pandemic condition keeps weighing the local currency Australian Dollar that kept the AUD/USD pair under pressure on the beginning day of the week.
The US dollar was high in demand on Monday as US President Trump signed four executive orders related to the COVID-19 pandemic. One order included the aid of $400 per week to the unemployment benefit reduced from the initial $600 per week.
The move by Trump came in after US Congress parties, Republicans & Democrats failed to reach a consensus over the next US stimulus package. Though Democrats have shown their willingness to compromise, no date for future negotiations has been confirmed.
Daily Technical Levels
Pivot point: 0.7158
The AUD/USD is trading within a wide trading range of 0.7185 level to 0.7143 level. Violation of this level may determine further trends in the market. On the higher side, AUD/USD may head for the next resistance area of 0.7230 and 0.7239 level. At the same time, a bearish breakout of 0.7143 level can extend selling until 0.7122 level. Sideways trading can be seen today. Good luck!