The pair caught a bit of a light breather in the past few sessions before all it needed was just one more poor data point out of China to knock it back down. The Chinese trade balance figures today were poor and it also highlighted a further fall in imports from Australia (19.9% year-on-year to be exact).

I mean, the fact is outside of Russia, most of China’s previously closely tied trading partners have seen a fall in trade when you look at the year-to-date numbers. It’s in part due to China trying to manage its geopolitical position but it also reflects much weaker demand conditions and that’s not a good thing for risk trades and the aussie.

AUD/USD is finding that out the hard way today, down 0.8% to 0.6520 levels at the moment.

The pair stays on course to retest the lows for the year and daily support at 0.6500 next. A break below that will put scrutiny on the 2022 lows near 0.6200 thereafter. Those will be the two key levels to watch for AUD/USD at the moment, as we gear towards the US CPI report later this week.