AUD/USD hit a 4-month low as bulls go on strike, increasing the likelihood the currency pair will break of support near 0.6850.
That area marks the 76.4 Fib of the 0.6715-0.7295 rally and is thought to include a 0.6850 option barrier. Escalating U.S.-Sino trade nL4N22T0XY and political nH9N22M01H tensions are spooking the bulls.
Upbeat U.S. econ data is maintaining the greenback's yield advantage at a premium to the aussie as Australian-U.S.
yield spreads linger near recent wides.
Disappointing Australian employment data also frightened buyers as short-term aussie rates markets RBAWATCH show a near 80% chance of an RBA rate cut at the central bank's June 4 meeting.
Gains in oil CLv1 futures and iron-ore DCIOc2 futures rallying to levels not seen since May 2014 have been unable to buoy AUD/USD. That could be a major concern for any remaining AUD/USD longs.
The technical outlook does not bode well for longs either as RSI studies suggest momentum rests with bears while AUD/USD continues to hold below the psychologically important 0.7000 area.
Should support near 0.6850 break bears are likely to target the 2019 low.
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