The AUD/USD has endured another rough night as the slide continues. Overnight price pressed into the 0.7100 support, which is a short and sharp sell-off from the recent highs.

The pressure really started coming onto the AUD/USD thanks to the yield play in the US. Yields on US bonds really started to move higher overnight and we saw the US 10-year Treasury note jumped 11 basis points to 3.18 per cent.

That saw the USD rally and that meant the AUD/USD was under pressure all session. This morning price hasn’t moved too far, while the NZD/USD continues to sell-off sharply.

Trade balance data showed that there was a bigger than expected surplus. However, the number hasn’t moved the AUD/USD, which is still holding the lows.

Aussie Outlook

The AUD/USD failed at the major level of 0.7300 only last week and we are now testing the 0.7100 level.

That’s a short and sharp move and one that has provided plenty of opportunities. We will have to watch for more downside here and if we can break and hold below 0.7100, then we might be in for another leg lower.

The 0.7100 level will hold up but the 0.7000 level will be a pretty big magnet that will draw price to it. 0.7000 is the bottom of the channel that we’ve been in all year and I am predicting a move to that price.