AUD/JPY: risk-off barometer playing out on trade war angst
|AUD/JPY was sent packing at the 82 handle in European trade having failed at 82.57 yesterday. The cross has since delved deeper into the 80 handle on the back of trade war angst, supported by 80.49.
- Forex today: yen breaks higher in Asia handover on heightened trade war angst
- China plans $3 billion of import tariffs against 128 US products - Reuters
Overnight, besides raising a WTO case and the implementation investment restrictions, Trump was announcing a raft of new tariffs aimed directly at China. The tariffs are to the tune of roughly USD60bn worth of Chinese imports to the US, will target the aerospace, information and communication technology, and machinery space at 25%. These will be implemented on the premise that American intellectual property (IP) needs protecting from China’s state-led and market-distorting efforts to steal US tech and IP.
- China Press: Trump is irresponsible to risk trade ties
Tariffs will target the aerospace, information and communication technology, and machinery space at 25%. China had said they will respond with ‘measured and proportional’ levies on the US, saying that Trump was irresponsible to risk trade ties. The yen picked up the bid again when China confirmed that it is planning tariffs on US steel, aluminium products, saying earlier that it is not afraid of a trade war and will defend its interests.
- Wall Street plunges… again
AUD/JPY levels
AUD/JPY has broken below the 81.50 support and 81.20, then 81.00 and has made a low of 80.50. 81.50 was a key resistance back in July 2016 and there is little in the way of support from here to 79.20. The weekly indicators are highly bearish with Momentum the strongest it has been for the year and as RSI heads for a test below 30 again, (daily sticks RSI also tracing 30). 82.30 is a key resistance to the upside in line with the 82.40 10-D SMA.
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