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  • Aussie drops as risk flows reverse on CNY shift.
  • Early Asia session drop takes the AUD into a new five-day low as bears begin to regain control.

The AUD/USD is dropping in Tokyo trading as risk appetite withdraws and safety flights prop up the Yen, sending riskier assets falling.

The Aussie has knocked back into 0.7520 as of writing, and is struggling to pump the brakes as a quiet early Tuesday session sees a sharp break in risk appetite.

Tuesday is a free and clear window for the AUD with nothing on the schedule, and Japanese figures came in largely at expectations, with the Japanese Unemployment Rate coming in steady at 2.5% and the Jobs/Applicants Ratio shifting slightly lower from 1.6 to 1.59.

The Chinese Yuan kicked today, crossing 6.4 for the first time since June of 2017, and the cross-flows are sending the other Asia-Pacific currencies lower while traders also back into the Yen on reaction.

AUD/USD Levels to watch

FXStreet’s Valeria Bednarik  highlighted the pair’s technical barriers looking forward: “the 4 hours chart shows that the pair was unable to surpass a modestly bearish 200 SMA, also limited by a daily descendant trend line coming from 0.7604. In the same chart, technical indicators are slowly grinding lower right below their mid-lines, but the downward momentum is limited, not enough to confirm additional slides ahead. The key support is 0.7505, the 23.6% retracement of the latest weekly decline, while to the upside, the mentioned trend line and the 200 SMA converge at around 0.7580, providing an immediate ahead of a more relevant one at 0.7620, the 50% retracement of the mentioned decline.”

Support levels: 0.7505 0.7470 0.7430

Resistance levels: 0.7580 0.7620 0.7650