Jan 28 (Reuters) - AUD/USD fell below the 10-day moving average Tuesday then struck a 5-session low on the back of U.S. President Donald Trump's latest tariff threats, and key Australia pricing data could lead to breaks of the psychological 0.6100 level and the 76.4% Fibo of the 0.5510-0.8007 rally.
Trump said Monday he plans to impose tariffs on computer chips, steel and drugs. The President also vowed to put tariffs on copper and aluminum imports. Australia is the seventh largest producer of aluminum and is the eighth largest copper producer. Australian bond yields and equity prices for Australian miners fell sharply, which weighed down AUD/USD.
USD/CNH rallied on the tariff rhetoric, which added further pressure on AUD/USD.
Australia Q4 CPI is now in focus. Estimates call for the RBA's weighted median and trimmed mean CPIs to drop sharply from Q3. Downbeat results could send yields lower still and increase the U.S. dollar's yield advantage over the Australian dollar as rate markets may price in RBA rate cuts earlier than is currently expected. AUD/USD bears may take control and eventually take out the Jan. 13 daily low, the 0.6100 level and the 76.4% Fibo.
The April 2020 monthly low at 0.5980 would then come into
focus.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)