The Australian dollar is continuing to approach an important support level around 0.7100. The direct cause is the significant decline in the Westpac Consumer Confidence Index for February, which fell to 82.1, marking three consecutive months of negative movement.

Market participants generally believe that this bearish sentiment, combined with the strengthening of the US dollar globally, is exerting considerable downward pressure on AUD/USD. The RBA (Reserve Bank of Australia) is also becoming more cautious about raising interest rates, raising concerns that the interest rate differential with the US Federal Reserve may narrow.

If the 0.7100 support is broken, traders generally expect the next support zone to be between 0.6800 and 0.6900. Going forward, the release of domestic economic indicators such as January employment data, wage index, and CPI will be crucial. The direction of the currency pair will likely depend on whether these data can halt the negative trend.

With consumer sentiment in the Australian economy remaining weak, declining steel demand in China is also impacting iron ore prices, and multiple factors are weighing heavily on the overall Australian dollar.