FxWirePro: AUD/USD extends weakness after Fitch revises Australia's rating outlook to negative

AUD/USD chart - Trading View 

AUD/USD is extending weakness for the 2nd straight session, trades 0.36% lower after closing 0.51% lower in the previous session.

Weakness in the pair has gathered pace after Fitch downgraded Australia’s outlook to negative while keeping AAA rating before a few hours.

On the other side, China's decision to raise the fiscal deficit target to over 3.6% of its GDP this year from the previous year's 2.8% bodes well for the pair.

China’s 13th National People's Congress (NPC) cut the GDP target for 2020, and signalled readiness to tighten grip in Hong Kong, which in turn will escalate China's tussle with the US.

If the US-China tussle escalates, the risk sentiment will likely weaken, weighing on the growth-linked Aussie dollar.

Technical studies suggest minor pullback as the pair clambers for support at 110H EMA at 0.6538.

Strong support lies at 0.65 area (converged 200H MA and 110-EMA). Break below 0.65 handle could drag the pair lower. 

Next major support aligns at 21-EMA at 0.6470 and then 55-EMA at 0.6428. Violation at 55-EMA negates any upside bias.