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Thomson Reuters
Oct 26 - 02:36 PM
AUD/USD - COMMENT-Resurgent Dollar Draws First Blood In AUD/USD
First appeared on eFXplus on Oct 26 - 11:15 AM

For weeks, the dollar has struggled to hit new highs against major currencies but AUD/USD's fall to 2-1/2 year lows suggests others may follow. Sterling and the euro appear particularly vulnerable. For AUD/USD, today's fresh 2018 low of 0.7021 opens the way for further declines to 0.6973, a weekly low from early February 2016, and ultimately the mid-January 2016 low by 0.6827.
Continued China trade uncertainty and yuan weakness are likely to weigh heavily on the aussie, especially after today's U.S. data. The report showed falling U.S. exports and rising U.S. imports, which is likely to draw the ire of U.S. President Trump.
IMM spec AUD/USD shorts have been gaining as well as USD/CNH approaches the key 7.00 level.
If the PBoC is unable to mount a significant defense of 7.00 in USD/CNH nL3N1X547C, AUD/USD is likely to keep probing new lows until the yuan and the U.S.-China trade situation stabilize.

AUD Chart: Click here

Majors 2018 Range: Click here

Source:
Thomson Reuters IFR Markets

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