AUD/USD drops to two-week lows, around mid-0.6900s

• The USD remains supported by tempered Fed rate cut expectations.
• Dismal Aussie business confidence data prompts some fresh selling.
• The focus shifts to the Fed Chair Jerome Powell’s scheduled speech.

The AUD/USD pair met with some fresh supply on Tuesday and dropped to near two-week lows, around mid-0.6900s in the last hour.

The pair extended the previous session's rejection slide from the vicinity of the key 0.70 psychological mark and added to last week's losses following the release of the National Bank of Australia's survey data, showing that business confidence index fell from 7 to 2 in June.

This against the backdrop of fading optimism over a quick resolution to the prolonged US-China trade disputes exerted some downward pressure on the China-proxy Australian Dollar and collaborated to the pair's weaker tone for the fourth consecutive session on Wednesday.

Meanwhile, the US Dollar remained supported by Friday's stellar headline NFP print, which forced investors to scale back expectations for an aggressive policy easing later this month, with deteriorating global risk sentiment further driving flows away from perceived riskier currencies - like the Aussie.

It would now be interesting to see if the pair is able to find any support at lower levels or the current downfall marks the resumption of the prior bearish trend as the focus now shifts to the Fed Chair Jerome Powell's scheduled speech later during the early North-American session.

This will be followed by Powell's two-day Congressional testimony on Wednesday and Thursday, which along with the release of the latest US consumer inflation figures will influence the near-term USD price dynamics and help to determine the pair's next leg of a directional move. 

Technical levels to watch