Technical Analysis

Aussie tumbles after China strikes to ban Australian coal imports at its Dalian port

AUD/USD slips to a low of zero.7100 on the again of the headlines

AUD/USD H1 21-02

The Australian greenback has had a wild trip up to now in the present day because it jumped to simply above zero.7200 after a stronger jobs report earlier than Westpac launched a report saying that it anticipated additional fee cuts by the RBA. The pair then fell in the direction of the 100-hour MA (crimson line) the place value was defended and traded round zero.7160 thereafter.

Nevertheless, as China moved to “assault” Australia from an financial perspective, AUD/USD fell previous each key hourly transferring averages and is now threatening a extra bearish near-term bias. Value is now hovering simply over the 19 February lows and this might precipitate an additional fall within the pair contemplating how bitter relations have been since final yr.

In case you missed the headlines from final yr:

Particularly, the Huawei incident is amongst one of many key the explanation why China is beginning to flip its again on Australia. You possibly can say that China’s transfer right here was one that may be seen coming as highlighted right here on the time:One of many different key headlines on the day was Australia transferring to ban Huawei from its market. Diplomatic relations between the 2 international locations are already in a fragile state throughout current months and the transfer right here is not going to assist that. What’s worse is that that is a cheap transfer and one thing that would immediate China reply in due type – and that presents a giant query mark over future financial ties between the 2.

There’s gentle help for AUD/USD round zero.7090 after which zero.7080 but when that is simply the beginning of issues to come back from China, anticipate the outlook for the Australian greenback to develop even bleaker within the coming months and that can weigh on the foreign money additional within the near-term as effectively.

Replace: Value now falls beneath the zero.7100 deal with to zero.7087.

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