“¢ Disappointing Chinese trade surplus data weighs for the second straight session.
“¢ Modest USD rebound/weaker commodities add to the downward pressure.
“¢ Technical selling below 0.76 handle further contributes to the ongoing downfall.
The AUD/USD pair extended its rejection slide from 100-day SMA hurdle and corrected back below the 0.7600 handle during the Asian session on Friday.
Against the backdrop of yesterday’s softer Aussie trade balance data, a modest US Dollar rebound kept exerting downward pressure on the major for the second consecutive session.
This coupled with an unexpected shrinkage in China’s trade surplus in May, primarily led by a sharp jump in imports, further weighed on the China-proxy Australian Dollar.
Moreover, a weaker sentiment around commodity space, especially copper, also did little to lend any support to the commodity-linked currency and stall the pair’s slide to a 4-day low level of 0.7584.
Meanwhile, the latest leg of sharp fall over the past hour or so could also be attributed to some fresh technical selling/long-unwinding pressure following a decisive weakness back below 50-day SMA support near the 0.7610 region.
With today’s downfall, the pair has now erased a major part of its weekly gains and remains vulnerable to slide further amid renewed fears of a full-blown global trade war as the focus now shifts to the key G7 summit in Canada.
Technical levels to watch
Any subsequent retracement is likely to find support near the 0.7565-60 region, which if broken might turn the pair vulnerable to slide back towards retesting the key 0.7500 psychological mark.
On the upside, the 0.7600-0.7610 region (50-DMA) now becomes immediate resistance, above which the pair could be headed back towards challenging 100-day SMA barrier near the 0.7665-70 region.
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