AUD/USD Threatening Test Of 0.6600 As Lower Yields, Softer Commodities Weigh

AUD/USD losses continued post the Asia close on Tuesday, as fallout from the on-hold RBA outcome continued. The pair got close to 0.6600 late in NY trade, before edging higher into the close. We sit in the 0.6615/20 region currently, with the USD seeing some modest downside pressure post the Fitch credit rating downgrade. Still the AUD lost 1.55% for Tuesday's session, comfortably the worst performer in the G10 space.

• From a technical standpoint, the pair has recently breached both the 20- and 50-day EMA, reinforcing bearish conditions. Attention is on the next key support at 0.6596, the Jun 29 low. On the upside, key short-term resistance has been defined at 0.6739, the Jul 31 high, where a break is required to reinstate a bullish theme.
• AU-US yield spreads shifted sharply lower yesterday, the 2yr spread back beyond -100bps, fresh lows back to early May of this year. Several forecasters have downgraded their terminal RBA projections post yesterday's outcome.
• Elsewhere, commodity indices were lower in terms of the aggregate Bloomberg index (-0.68%), while the base metals index fell by -1.26%. Negative sentiment around China property related assets weighed on iron ore yesterday. Futures sit back at $106/ton.
• The data calendar is empty today.