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Thomson Reuters
Jul 19 - 02:36 PM
AUD/USD - COMMENT-Yuan's Influence Troubles AUD/USD Longs
First appeared on eFXplus on Jul 19 - 12:30 PM

AUD/USD bulls didn't have long to celebrate the large upside surprise to June Australian jobs data and are now fretting over a break below 0.7300 as the fall in China's yuan deepens.
USD/CNH hit a new trend high and gave the greenback a broad based bid.
U.S.-China trade tensions, slower China economic growth and expected Fed rate hikes are driving the rally.
The U.S. dollar's bid has combined with Aussie dollar's proxy for China's economy and currency to drive AUD/USD toward key 0.7300/30 support.
The 61.8 percent Fib of 0.6827-0.8136, June's low and 0.7300 barriers sit there.
Today's price action heightens bearish chart signals.
RSIs are biased down, a long upper wick is forming on the monthly candle and AUD/USD is back below the 10 and 21-DMAs.
Options markets are gearing up for a 0.7300 break nL1N1UF0KV as demand for AUD vol and AUD puts increases.
A break below 0.7300 is likely to ignite the next leg of the longer-term bear market.
Bears would then
target 0.7110/60.

chart: Click here

Thomson Reuters IFR Markets


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