Australian dollar declines on disappointing economic data

AUDUSD dropped to a one-week low on Tuesday, sliding 1% by the early U.S. session. The decline was driven by a fall in iron ore prices and an unexpected widening of Australia’s current account deficit. Meanwhile, slightly better-than-expected U.S. manufacturing data for August boosted optimism and strengthened the U.S. dollar.

This fresh weakness is generating an initial reversal signal on the daily chart, as the price breaks out of a recent six-day consolidation range. The fall below the 10DMA (0.6765) and subsequent acceleration are putting pressure on the initial Fibonacci support at 0.6711 (23.6% retracement of the 0.6348 to 0.6823 rally). A break below this level would reinforce the negative signal, with the near-term bias remaining bearish as long as the price stays below the broken 10DMA.

Southward-trending momentum indicators further weaken the outlook, indicating room for a deeper pullback and exposing a cluster of moving averages in the 0.6690/15 zone.

Today’s close will be closely watched for clearer signals, but traders are also awaiting key U.S. labor reports (JOLTS, ADP, NFP) due in the coming days. These reports will provide crucial insights into the U.S. labor market, a key factor for the Federal Reserve ahead of its policy meeting later this month.

Res: 0.6765; 0.6794; 0.6812; 0.6823
Sup: 0.6694; 0.6642; 0.6613; 0.6586