Outlook Remains Bearish

The greenback strengthened on Tuesday which pressured AUD/USD lower, the pair dropping as low as 0.7427 before staging a short lived recovery, last trading at 0.7447.

• AUD is likely to remain under pressure from the coronavirus situation in NSW, there were 89 new cases on Tuesday, down from 112 on Monday. NSW Premier Berejiklian expressed hope that today's figures would trend in the same direction, but cautioned against drawing inferences from a short term movement lower in cases. The government did announce additional support measures yesterday, increasing support for those affected by lockdowns should the lockdown extend into a fourth week.
• From a technical perspective AUDU/SD attention is on key short-term support as the recent corrective bounce looks to have concluded. Price recently found resistance at 0.7599, Jul 6 high. The outlook is bearish and the focus is on 0.7369, the bear channel base drawn off the Feb 25 high. The recent move lower maintains the price sequence of lower lows and lower highs and moving average studies remain in bear mode. Initial resistance is at 0.7534.
• It is a light economic docket for today, Westpac Consumer Confidence is slated for release but is not expected to be a market mover. CBA says: "The consumer confidence index for July will not move AUD much today. We consider the path of least resistance is further falls in AUD/USD led by a reconsideration of the timing of increases in the US Funds rate. We think the 38.2% Fibonacci level of 0.7336 is a good level to have in mind in the short term." Elsewhere the RBNZ rate announcement could be a driver for AUD.