“¢ A fresh round of US-China trade tensions continues to weigh on Aussie.
“¢ Bears seemed largely unaffected by today stronger Chinese PMI prints.
“¢ Relatively thin US economic docket seems unlikely to provide any respite.
The AUD/USD pair kept losing ground through the early European session and dropped to over two-week low in the last hour.
Thursday’s news report, saying that the US President Donald Trump is ready to impose additional tariffs on $200 billion worth of Chinese imports as early as next week, resurfaced fears of a full-blown trade war between the world’s two largest economies.
Against the backdrop of escalating US-China trade tensions, the bearish pressure remained unabated for the fourth consecutive session and the pair failed to gain any respite from today’s stronger Chinese PMI prints for August.
Adding to this, a fresh wave of global risk-aversion trade was further seen benefitting the US Dollar‘s relative safety, against perceived riskier currencies – like the Aussie and kept exerting downward pressure on the major.
Meanwhile, a weaker tone around copper prices also did little to lend any support to the commodity-linked Australian dollar and stall the pair’s slide below the 0.7240-35 strong horizontal support.
Today’s relatively thin US economic docket seems unlikely to provide any meaningful impetus and hence, a follow-through weakness, led by some fresh technical selling, now looks a distinct possibility.
Technical levels to watch
The ongoing downslide could get extended towards the 0.7200 handle, below which the pair seems all set to a new leg of bearish trajectory in the near-term. On the flip side, recovery attempts might confront fresh supply near the 0.7270-75 region and any subsequent up-move should now be capped near the 0.7300 handle.
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