AUD/USD headed below key 0.7450?

Currently, AUD/USD is trading at 0.7574, up 0.05% on the day, having posted a daily high at 0.7579 and low at 0.7570.

Forex today: even more upside in the dollar and yields

AUD/USD was the worst performer with investors eager to unwind the overstretched long position with commodities in jeopardy and a resurgence of the greenback.  Momentum has flipped to negative, according to analysts at Westpac who are targeting 0.7510 next (late Jan minor low). "The strong US dollar and AUD’s high-beta status are the main factors."

The US session was a mix up of lower stocks but a strong dollar and further climbs in yields with the US 10yr treasury yields up from 2.45% to 2.50% and the 2yr yields moving higher from 1.28% to 1.33%. The market is pricing in a Fed hike as soon as this month and the US data has been supportive of such an outcome.

AUD/USD intermarket: DXY and lower commodities to weigh on Aussie?

In respect to the Aussie, the nations the country's performance has been heavily weighted on the commodity sector and with a resurgence in the greenback, China's commodity and manufacturing industry, of which Australia's export industry rely's on to the tune of roughly 34% of exports, could come under pressure and weigh on the Aussie and the market knows it.  However, analysts at Westpac argue, "Against that, coal and iron ore are likely to sustain a good portion of their dramatic rises, and economic data for Q4 and Q1 should improve, but these forces are subservient to the US dollar’s trend."

Australia AiG Performance of Services Index down to 49 in January from previous 54.5

Outlook for the antipodeans and rates - Westpac

AUD/USD levels: "A break below 0.7450 could trigger early pullbacks"

The analysts at Westpac offered an in-depth technical analysis in the Aussie:

"Risk of retesting 0.6825-30 low persists, but the price action off highs in 2016 suggests that a broader consolidation is forming. Weekly momentum (not shown) is also supportive of further rebounds Intra-month/inter-week 

 A solid has appeared to have formed in the 0.7145-60 area and recent rebounds have been dynamic. However, these rebounds now show signs of maturing on attempts to move above 0.7500 implying that an inter-week top may be forming. This top is yet to be confirmed (daily momentum is not yet rolling over), but the bias is for building for a slide to the 0.7300-50 area. Any slippage back below 0.7450 could trigger early retracements. The style and depth of such pullbacks will determine how strong the following upswing will be Conclusion.

Gyrating consolidation patterns persist. An interim base has formed at 0.7145-60. The current up-move has limited upside. A squeeze towards 0.7570 may occur, but a deep corrective is now likely. A break below 0.7450 could trigger early pullbacks."