AUD/USD nosedives to fresh 7-month low amid trade tension, all eyes on Aussie data

• AUD/USD takes the hit of fresh trade tension while declining to multi-month low.
• North Korea’s missile-test run adds pressure to sentiment ahead of Aussie Retail Sales, PPI.
• The US employment data and trade/political news maintain their importance.

The AUD/USD pair drops to fresh low since January, 0.6794, during the early Asian session on Friday as Aussie traders get extra cautious ahead of the monthly data amid recent trade tension.

The US President Donald Trump’s surprise announcement of 10% tariffs on remaining $300 billion worth of Chinese goods from September 01 not only triggered fresh trade tension across the board but also dragged the Antipodeans to south. Following the news, the safe-havens like Japanese Yen (JPY) and Gold surged whereas the US treasury yields plummeted.

Adding to the pessimism were the latest reports of another missile test from North Korea, the third in its kind in nearly a week.

Investors now await fresh clues from Australia’s June month HIA New Home Sales and seasonally adjusted Retail Sales in addition to second quarter (Q2) Producer Price Index (PPI) data. While the housing market figure previous rose 28.8%, Retail Sales is expected to increase by 0.3% versus 0.1%. Further, PPI could soften from 0.4% to 0.3% on a QoQ basis but may remain unchanged at 1.9% on a yearly format.

Following the data release, markets will focus on the all-important July month employment statistics from the US. Though, this doesn’t reduce the importance of trade/political headlines to fuel the momentum.

Technical Analysis

Given the limited room between the current prices and January low of 0.6684, coupled with the oversold condition of 14-day relative strength index (RSI), traders may now remain on the lookout for upside beyond June month low of 0.6831 in order to portray a short-covering move towards 0.6860 and 0.6900 round-figure.