Australian Dollar weakens to below 0.6500 amid escalating US-China trade war tensions and USD strength

• AUD/USD declined by 0.93% to 0.6453 on Monday.
• The Aussie remains pressured by US-China trade war concerns and USD strength.
• Strong US data has also helped the USD over the session.

The AUD/USD pair opened the week on a negative note, declining by 0.93% to 0.6455 in Monday's session, snapping a three-day winning streak. This shift in sentiment can be attributed to the fundamental outlook deteriorating in the market due to geopolitical tension and economic uncertainties weighing on investor confidence.

US President-elect Donald Trump's threats against countries interested in using the BRICS currency by imposing tariffs has raised fears of a trade war between the US and China and turned the market mood sour. On the data front, US ISM PMI data has also fueled the USD's rise.

Daily digest market movers: Australian Dollar weakens against USD, markets digest US data

• The ISM Manufacturing PMI rose to 48.4 in November from 46.5 in October, signaling a softer contraction in the manufacturing sector.
• The Employment Index rose to 48.1 from 44.4, indicating a slight improvement in hiring activity.
• The Prices Paid Index declined to 50.3 from 54.8, reflecting a moderation in input cost pressures.

AUD/USD technical outlook: Upside remains limited below the 20-day SMA

The AUD/USD pair snapped a three-day winning streak on Thursday, getting rejected by the 20-day SMA. Although the pair has recovered some ground, as long as it doesn't conquer this level, the upside will be limited. The RSI indicator is still below the neutral 50, while the MACD is also negative, both suggesting that bearish pressure is still intact.