AUD/USD Can't Hold Above 0.6500, Hits Fresh Cyclical Lows

AUD/USD couldn't hold above 0.6500 late in the NY session, trading to fresh cyclical lows just under 0.6440. We sit around 0.6460 presently, slightly above closing levels. Downside targets continue to be revised lower from a technical standpoint, 0.6402 the May 15 2020 low and beyond that is 0.6373, the low on May 4 from that year, which are now potential focus points. Yesterday’s intra-day high of 0.6550 is a near term resistance point.

• The data calendar is empty until tomorrow's retail sales prints for August (+0.4% expected, versus +1.3% prior).
• Cross asset signals remain a significant headwind to the currency. Equities were weaker, while the VIX closed above 32%. The MOVE index is also almost back to early July cyclical highs.
• The relentless rise in core short end yields continued, led by gilts.
• The Bloomberg aggregate commodity index dropped 1.6%, while base metals fell by 2.58%. Iron ore steadied though, edging back up to $96.55/tonne. Onshore steel prices in China rose yesterday.
• The A$ was middle of the pack from a G10 standpoint for Monday’s session. AUD/NZD continued to push higher though; the pair is now through 1.1400 (last 1.1450).