• The AUD/USD is almost flat during the day, but risks are skewed to the downside.
• Concerns about a global economic recession prevailed; the greenback rose to a 52-week high, as the DXY broke above 107.000.
• Credit Suisse analysts see potential that the major could slip towards 0.6460s once it clears the 0.6757.

AUD/USD recovers from YTD lows reached on Tuesday, trimming some losses, but it remains at the lower end of the weekly range as the North American session begins. At 0.6800, the AUD/USD is barely flat.

Risk aversion emerges as Wall Street opens, and the greenback stays strong

Given the backdrop that concerns of a global economic slowdown persist, the US Dollar remains strong, putting a lid on the major. Talks between US and China policymakers earlier in the week appear to ease tensions between both countries. In fact, US President Joe Biden is assessing lifting some tariffs on Chinese goods and services imposed by the Trump administration.

Concerning China’s coronavirus crisis, during the Asian session, Shanghai reported more than 100 cases, and authorities ordered massive testing. That re-ignited fears of another lockdown in China’s second-largest city.

Those factors mentioned above, alongside tumbling Iron Ore prices, might keep the AUD/USD under pressure. In the meantime, the US Dollar Index, a gauge of the greenback’s value against a basket of peers, rises 0.44% to 106.969, a headwind for the AUD/SD. Further downward action is expected unless AUD/USD traders reclaim the 0.6900 figure.

At the time of writing, the US docket features the US S&P Global PMIs for June in Services and Composite, which beat expectations. The AUD/USD reacted downwards, from around the daily highs at 0.6826, towards 0.6804, putting the 0.6800 figure in sight.

Analysts at Credit Suisse see potential that the AUD/USD might reach 0.6461 once sellers clear 0.6757. “Support stays at the 50% retracement of the 2020/21 rise at 0.6757, a break below which is needed to enable a further downside to 0.6643 and 0.6609/00, with potential to reach the next key support at the 61.8% retracement at 0.6461 in due course.”

At 14:00 GMG, the US economic docket will feature the US ISM Non-Manufacturing PMIs, which would shed additional light on the status of the US economy. Later in the day, the FOMC minutes will be revealed, alongside the JOLTs Job Openings report.

AUD/USD Key Technical Levels