AUD/USD breaks below 0.71 to touch its lowest level since February 2016

• Risk aversion weighs on the AUD on Tuesday.
• US Dollar Index turns positive on the day near 95.30.
• Copper futures fall more than 1%.

The AUD/USD pair failed to hold above the 0.71 mark on Tuesday and slumped to its lowest level since February of 2016 at 0.7085. At the moment, the pair is trading a couple of pips above that level, down 0.4% on the day.

Earlier in the day, National Australia Bank's Business Confidence index slipped to 4 in July from 7 in June and fell short of the market expectation of 5. Although the market didn't show an obvious reaction to the data, the AUD came under pressure later in the day following reports of China applying to the WTO for authorization to impose retaliatory sanctions against the United States. This development also weighed on commodities and copper futures lose more than 1% on the day to put some extra weight on the AUD's shoulders.

In the meantime, the greenback started to retrace Monday's losses and the US Dollar Index turned positive above the 95 handle. As of writing, the US Dollar Index was up 0.17% on the day at 95.32. 

In the early trading hours of the Asian session, Westpac is scheduled to publish its Consumer Confidence, which fell 2.3% in August. The next significant data from Australia, unemployment figures, however, will be published on Thursday.

Technical outlook

The next support for the pair aligns at 0.7060 (Feb. 12, 2016, low) followed by 0.7000 (psychological level) and 0.6970 (monthly low, Feb. 2016). On the upside, resistances could be seen at 0.7130 (daily high/Monday high), 0.7190 (Sep. 7 high) and 0.7240 (20-DMA).