Corrects 0.6850/55 support to 0.6750/55 support
Rising concerns about U.S.-Sino trade have left AUD/USD in sell-the-rallies mode after U.S. President Trump's comments yesterday.
The failure of the aussie's rally, after reaching the 21-DMA on the surprise RBNZ rate hold, illustrates this. AUD/USD has since reversed course, sliding to a 12-day low.
President Trump on Tuesday shook investors a bit after saying tariffs could rise substantially if China does not make a deal nL4N27T1DF. Safe haven flows have sent emerging market and high beta currencies lower versus the greenback as a result of the comments. The yuan CNH=, which the aussie is highly correlated to, weakened, driving USD/CNH above 7.0300.
Australian government 10-year bond yields AU10YT=RR fell sharply and now threaten old resistance-turned-support near 1.2%.
AUD/USD's slide is approaching key support in the form of theOct. 25 0.6810 low and 55-DMA.
If yields break below 1.2% it could drive AUD/USD below those supports.
Technicals suggest that AUD/USD has a good chance to break that support as RSIs are biased down while the 10- and 21-DMAs exert downside pressure.
A break below 0.6810/15 is likely to trigger stop losses.
AUD/USD shorts will then target support near 0.6750/55 and 0.6710/25.
A break of the latter should result in a test of 2019's 0.6670 low.