The AUD/USD pair is slumping towards the 0.6400 support level early Tuesday, extending losses for the third session. Escalating Middle East tensions and the diminishing likelihood of near-term Federal Reserve (Fed) rate cuts are fueling risk-off sentiment, weighing on the Aussie.

Market Movers

• Middle East Tensions: Anticipation of Israeli retaliation against Iran heightens geopolitical risk, disrupting global supply chains and pressuring risk-sensitive currencies like the AUD.
• US Fiscal Policy: Rising US Treasury yields (currently near 4.68%) reflect reduced expectations for June/July Fed rate cuts. Robust March Retail Sales data reinforce a hawkish outlook.
• China GDP: Despite stronger-than-expected Q1 GDP growth, market sentiment remains subdued. However, any sustained economic improvement in China could benefit the AUD.

Domestic Focus: Australian Jobs Data Ahead

Thursday’s Australian Employment figures for March will be closely watched. Forecasts call for a slight rise in the Unemployment Rate to 3.9% and a slowdown in job creation.

Technical Outlook

AUD/USD remains under pressure, with the potential for further decline towards the 0.6400 support level.