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Analysts at Citibank point out that US-China tension escalation and the concern of second wave crisis limited the performance of the Australian dollar. They argue AUD has a strong correlation to CNH, so, if the Chinese currency weakens, the other follows. 

Key Quotes:

“In the short-term a lot of the idiosyncratic upside drivers for Aussie (advanced virus containment, reopening economy, synchronized government and central bank support) seem well understood and therefore likely priced in.” 

“In the medium term, Aussie is likely caught between two opposing forces. The huge amount of stimulus the RBA and government have provided make the RBA’s forecast V-shaped recovery relatively attainable. The more pronounced and more quick the global recovery from the current crisis, the more trade wars can matter from a number and headlines perspective. AUD has a strong correlation to CNH; if the trade war escalates further and CNH weakens then AUD likely follows.”

“AUDUSD’s RSI has repeatedly been at overbought levels. The pair’s upside room may be limited at 0.6616-0.6672, with support at 0.6214-0.6254.”