The AUD/USD has been feeling some heat this week and even a strong retail sales number can’t stem the bleeding.

Retail Sales for August came in at 0.3% versus 0.2% expected. Normally that would be enough to help the AUD/USD find a bid but it appears the headwinds are simply too strong.

At the moment the rising yields in the US are simply making the USD too appealing. And money is flowing out of the AUD and into the USD. With a yield on the US 10-year now above 3.2% it’s not a surprise. There will likely be more on the way soon.

Today’s US employment will likely see even more pressure on the AUD/USD, if the jobs report comes in anything like we saw with the ADP earlier in the week.

Aussie Outlook

The AUD/USD had fallen sharply from the major level at 0.7300 and is now beneath support at 0.7100.

0.7000 is now clearly in focus and depending on what happens with US jobs, that might come sooner rather than later.

The bottom of our longer-term channel is lining up perfectly with 0.7000, so I will be looking to enter short on pullbacks with a target at that level.