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  • AUD/USD dips as escalating tensions between the US and China put a bid under the US dollar. 
  • AUD/USD remains trapped in a contracting triangle on the daily chart. 

AUD/USD is feeling the pull of gravity amid escalating tensions between the US and China and the US and World Health Organization (WHO). 

The currency pair is trading at 0.6515 at press time, representing marginal losses on the day, having hit a high of 0.6552 early Tuesday. 

The editor-in-chief of China’s Global Times accused President Trump of ‘witchcraft’ for using hydroxychloroquine for treating coronavirus. Meanwhile, President Trump threatened to permanently freeze funding to WHO if the global body does not commit to major substantive improvements within the next 30 days.

While the Aussie dollar has pulled back from session highs, the immediate bias for the outlook remains neutral. This is because the pair is trapped in a narrowing price represented by trendlines connecting April 30 and May 11 highs and May 4 and May 15 lows. 

A range breakdown, if and when confirmed, the bias would turn bearish. Alternatively, a breakout would imply a continuation of the rally from lows below 0.55 observed in March. 

Daily chart

Trend: Neutral

Technical levels