AUD/USD Slides Below 0.6500 Ahead of Key Economic Week

AUD/USD has weakened to 0.6485, falling 0.5% (55 pips) as traders position defensively ahead of a pivotal week featuring RBA rate decisions and crucial economic data releases. The US Dollar Index strengthened to 104.15, adding pressure on commodity currencies. Markets are pricing in a 65% probability of an RBA rate hold at Tuesday's meeting, though recent inflation data has increased hawkish expectations. Technical analysis shows AUD/USD breaking below the psychological 0.6500 support level, with the next target at 0.6450 (July low). The pair faces resistance at 0.6520 (previous support). Chinese PMI data due this week could significantly impact AUD sentiment given Australia's trade exposure. Risk-off sentiment in global markets has also weighed on the Australian dollar. Traders should monitor upcoming Australian employment and Chinese manufacturing data for directional cues.