- Sluggish Chinese imports, tariff threats weigh on Aussie amid broad USD strength.
- Short economic line highlights news for fresh impulse.
An extended weekend due to Queen’s Birthday didn’t bode well for the Aussie traders as greenback strength caused heavy losses that are haunting the buyers around 0.6560 at the start of Tuesday’s Asian session.
Global markets initially responded to the absence of tariffs on Mexico and optimism surrounding the US-China trade deal with a risk-on in favor of the US Dollar (USD). The move was later on stretched as downbeat numbers from global economies pushed investors to the greenback.
The US 10-year treasury yield, a gauge of macro risk-tone, grew 7 basis points to 2.15%.
The present downturn can also be attributed to China’s sluggish import data and the US President Donald Trump’s recent warnings that failure to reach a deal can call for fresh tariffs.
Looking forward, NAB business conditions and business confidence data for May are on the cards to follow. The second-tier economic indicators flashed 3 and 0 figures previously.
With a few economics on hand, political/trade news will be followed more for fresh clues.
Technical Analysis
Late-May highs surrounding 0.6940 can offer an immediate rest to sellers ahead of diverting them to 0.6900 and multiple bottoms around 0.6860. However, an upside clearance of 50-day simple moving average (SMA) level of 0.7015 can recall 0.7050 on the chart.
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