- King dollar retains control ahead of the US tariffs announcement.
- Aussie: Risks skewed to the downside, as all eyes remain on fresh US tariffs on China.
Despite the recovery attempts, the bears remain in control, now pushing the AUD/USD pair back towards the 0.7100 level, as a sense of caution prevails ahead of the US tariff announcement due later on Monday.
AUD is closing in on our mid-2019 forecast of USD0.70 – Westpac
The spot returned to the red zone below the midpoint of the 0.71 handle and flirts with the daily lows of 0.7142, as loom US tariffs threat on China continues to keep the greenback underpinned across its main peers.
The US President Trump is likely to announce an additional $200 billion of Chinese imports on Monday. However, the Wall Street Journal (WSJ) reported that the tariff level will probably be about 10%, below the 25% considered by the Trump administration.
Meanwhile, the WSJ also reported that China may decline to attend trade talks due next week as Beijing won’t negotiate under threat. These headlines could investors on the edge, weighing negatively on the higher-yielding currency, the AUD.
Further, holiday-thinned trading could exaggerate the moves, as Japanese markets are closed in observance of Respect-for-the-Aged Day. Calendar-wise, there is nothing relevant from the US docket for today and hence, trade-related developments will continue to have a major influence on the pair.
AUD/USD Technical Levels
“In the 4 hours chart, the pair met selling interest around a bearish 100 SMA, and settled a few pips below a bullish 20 SMA, while technical indicators head sharply lower, the RSI already at 46, in line with further slides ahead. The bearish potential will likely increase on a break below 0.7130, a short-term static support level. Support levels: 0.7130 0.7095 0.7050. Resistance levels: 0.7175 0.7225 0.7260,” FXStreet’s Chief Analyst Valeria Bednarik noted.
Share
