The AUD/USD is under increasing pressure as a rising USDisn’t helping the cause.

Overnight we are seeing the USD running away as it has now reached 92.50 on the US Dollar Index. At the same time, increasing bond yields are likely one of the key drivers here as for the time being, the USD appears to be an appealing proposition.

There is also a real undertone of weakness in risk-on markets such as the AUD, which had previously seen a big surge higher basically since March 2020. Stocks are also very shaky at the moment and continue to look soft.

We also heard from the Aussie PM today, who is now saying that the China virus is nothing more than a bad flu. Most of us already know this, but if the PM and media are starting to say it, we know the narrative is starting to turn.

That takes us to where the key levels are in the AUD/USD as we head into Tuesday trade.

For me, I think we are almost certainly going to be testing the 0.7600 level and we could almost look at a trade with that level being an exit point. As we’ve seen before there has been strong support there in the past, so there is no guarantee that it will break – but a test remains likely.

A failure on a push higher, under the most recent swing high, could be a good short entry here.