• AUD/USD kicks off the new week on a softer note and is pressured by a combination of factors.
• China’s economic woes continue to weigh on investors’ sentiment and the risk-sensitive Aussie.
• Bets for one more Fed rate hike in 2023 underpin the USD and contribute to a mildly softer tone.

The AUD/USD pair meets with some supply on the first day of a new week and trades with a mild negative bias through the early part of the European session. The pair is currently placed just below the 0.6400 round-figure mark and remains well within the striking distance of its lowest level since November 2022 touched last Thursday.

A smaller rate cut by the People’s Bank of China (PBoC) signals limited policy support for the economy despite worries about a deepening crisis in the domestic property sector. This, in turn, continues to weigh on investors' sentiment, which is evident from a generally weaker tone around the equity markets, and undermines the risk-sensitive Australian Dollar (AUD). Apart from this, a bullish US Dollar (USD) is seen as another factor exerting some downward pressure on the AUD/USD pair.

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currency, holds steady just below its highest level in more than two months in the wake of hawkish Federal Reserve (Fed) expectations. It is worth recalling that the minutes of the July 25-26 FOMC meeting showed that policymakers continued to prioritize the battle against inflation. Moreover, the incoming US macro data point to an extremely resilient economy and support prospects for further tightening by the Fed.

Meanwhile, the view that the US central bank will keep rates higher for longer remains supportive of elevated US Treasury bond yields and continues to lend support to the Greenback. This, in turn, suggests that the path of least resistance for the AUD/USD pair is to the downside. Bearish traders, however, might refrain from placing aggressive bets ahead of the crucial  Jackson Hole Symposium later this week, where comments by central bankers might infuse significant volatility in the markets.

Even from a technical perspective, the recent slide below the 0.6600 mark, which confirmed the bearish double-top breakdown, validates the near-term negative outlook for the AUD/USD pair. That said, the Relative Strength Index (RSI) on the daily chart is flashing slightly oversold conditions. This might hold back bearish traders from placing aggressive bets in the absence of any relevant market-moving economic releases from the US on Monday and ahead of the key event risk