AUD/USD is stuck in a range, tariff deadline looms

• AUD/USD has been restricted to 0.73 to 0.7420 range since June 27.
• Trade jitters mount ahead of a US move to impose $34 billion of tariffs on Chinese exports.

The AUD/USD pair is reporting marginal gains in Asia amid rising fears of US-China trade war.

The currency pair has been restricted to 0.73 to 0.7420 range since June 27 and could have a tough time scaling the upper end of the trading range as the markets are getting jittery ahead of a July 6 deadline when the United States is due to impose the tariffs on Chinese exports.

China has assured that it will “absolutely not” fire the first shot in a trade war with the United States but has vowed to retaliate in kind if the US implements tariffs on $34 billion of Chinese imports on July 6.

The fear of a full-blown trade war between the US and China could keep the AUD (a proxy for China) and CNY under pressure.

That said, the AUD/USD technical set up is teasing a bullish break of the 0.73 – 0.7420 trading range. At press time, the currency pair is trading at 0.7382.

AUD/USD Technical Levels

Resistance: 0.7424 (July 4 high), 0.7450 (38.2% Fib R of June 6 high – July 2 low), 0.75 (50-day moving average).

Support: 0.7367 (session low), 0.7327 (61.8% Fib R of Jan 2016 low – Jan 2018 high), 0.73 (psychological support).