“¢ Escalating US-China trade tensions prompts some aggressive selling on Wednesday.
“¢ Resurgent USD demand adds to the already weaker sentiment.
“¢ Technical selling below 0.7400 might continue exerting downward pressure.
The AUD/USD pair continued losing ground through the mid-European session and has now weakened back below the 0.7400 handle.
The pair extended this week’s rejection slide from the 0.7485-80 region and came under some intense selling pressure on Wednesday after the Trump administration threatened to impose additional tariffs on around $200 billion worth of Chinese imports.
Escalating US-China trade tensions, coupled with resurgent US Dollar demand aggravated selling pressure around the trade-sensitive/China-proxy Australian Dollar and dragged the pair to an intraday low level of 0.7383.
Technical Analysis
With today’s downfall, the pair has now reversed all of its gains recorded last week and a subsequent drop below the 0.7400 handle, 200-hour SMA, might now be seen as the end of recent corrective bounce.
A follow-through selling would mark the resumption of the prior depreciating move and turn the pair vulnerable to head back towards retesting over two-year lows, set earlier this month.
Spot Rate: 0.7393
Daily High: 0.7456
Trend: Bearish
Resistance
R1: 0.7404 (200-period SMA H1)
R2: 0.7456 (current day swing high)
R3: 0.7486 (R1 daily pivot-point)
Support
S1: 0.7361 (last Thursday’s swing low)
S2: 0.7310 (over 2-year low set on July 2)
S3: 0.7260 (S2 weekly pivot-point)
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