Ella 
The AUD/USD pair encountered some supply on the first day of the new week, with a mildly negative bias in the AUD/USD pair early in the European trading session. AUD/USD is now just below the 0.6400 round-figure mark, still some way off the lowest level since November 2022 hit last Thursday.
The smaller rate cut by the People’s Bank of China (PBoC) signaled limited policy support for the economy despite concerns about a deepening crisis in the domestic property sector. This in turn continued to weigh on investor sentiment, as evidenced by a broadly weaker tone in equities and weakened the risk-sensitive Australian dollar (AUD). Apart from this, a bullish dollar is also seen as another factor putting some downward pressure on the AUD/USD pair.
Indeed, the U.S. dollar index (DXY), which tracks the greenback against a basket of currencies, held steady below its highest level in more than two months amid hawkish expectations from the Federal Reserve. It is worth recalling that the minutes of the July 25-26 FOMC meeting showed that policymakers continued to prioritize the fight against inflation. In addition, upcoming U.S. macro data show that the economy is extremely resilient, supporting the prospect of further tightening by the Federal Reserve.
At the same time, the view that the U.S. central bank will keep interest rates higher for a longer period still supported the rise in U.S. Treasury yields and continued to provide support for the dollar. This in turn suggests that AUD/USD has the least resistance to the downside. Still, bearish traders may refrain from making aggressive bets ahead of the Jackson Hole symposium later this week, as comments from central bankers could send markets wildly volatile.
Even from a technical standpoint, AUD/USD recently dipped below the 0.6600 mark, confirming a bearish double top break and validating the near-term negative outlook for the AUD/USD pair. Nonetheless, the relative strength index (RSI) on the daily bar chart remains slightly oversold. That could deter bearish traders from placing aggressive bets ahead of key event risks in the absence of any relevant market-moving U.S. economic data on Monday.
