On Tuesday, driven by a significant drop in energy and metal prices, the Australian dollar weakened for the seventh consecutive trading day. Given Australia's heavy reliance on commodity exports, the Australian dollar is particularly sensitive to fluctuations in these assets.

Market analyst Akhtar Faruqui said that the Australian dollar may receive support as strong employment data shows tight labor market conditions and raises concerns about the possibility of the Reserve Bank of Australia raising interest rates. Investors are looking forward to the release of the Australian Manufacturing and Services PMI data this week to measure the health of the economy.

Due to increasing bets on the Federal Reserve's interest rate cut in September, the US dollar is facing challenges that may limit the downward potential of the Australian dollar against the US dollar. Federal Reserve Chairman Powell pointed out that he is increasingly hopeful about the progress made in inflation in recent months. Meanwhile, Federal Reserve Governor Waller stated that the time to lower policy rates is getting closer and closer.

The Australian dollar is currently trading around 0.6635 against the US dollar. The daily chart shows that the Australian dollar is declining against the US dollar within a downward channel, indicating a bearish trend. On the 14th, the relative strength index (RSI) was below the 50 level, indicating confidence in the bearish trend.

The Australian dollar against the US dollar may test the lower boundary of the downward channel around 0.6630. If it falls below this level, it may force the exchange rate to find a pullback support level around 0.6590.

The direct resistance level of the Australian dollar against the US dollar appears near the 9-day moving average (currently at 0.6714), followed by a psychological level of 0.6700. Breaking through the latter may lead to the Australian dollar testing the upper boundary of the downward channel near 0.6760 against the US dollar, followed by a six-month high of 0.6798.

AUD/USD daily chart