AUD/USD drops to fresh session lows, around 0.7170 region
|- AUD/USD came under some selling pressure on Friday amid escalating US-China tensions.
- The USD drove some haven flows and was further supported by upbeat monthly jobs data.
- Technical selling below the 0.7200 mark also contributed to the pair’s intraday bearish slide.
The AUD/USD pair continued losing ground through the early North American session and refreshed daily low, around the 0.7175-70 region in the last hour.
The pair witnessed an intraday turnaround from the 18-month high level of 0.7243 after the US President Donald Trump signed executive orders that ban US transactions with popular Chinese apps – Tencent's WeChat and ByteDance's Tiktok. The announcement took its toll on the global risk sentiment, which underpinned the US dollar's relative safe-haven status and drove flows away from the perceived risker aussie.
The USD maintained its strong bid tone following the release of the closely watched US monthly jobs report. The headline NFP showed that the US economy added 1.763 million jobs in July and the unemployment rate dropped to 10.2% from 11.1% previous. However, worries about the pace of the US economic recovery and the impasse over the US fiscal stimulus measures held the USD bulls from placing aggressive bets.
Meanwhile, the latest leg of a sudden fall over the past hour or so was led by reports that the US administration is considering imposing personal sanctions on Hong Kong leader Carrie Lam. This, in turn, added to concerns over worsening US-China relations and continued driving some haven flows towards the USD.
The intraday slide took along some short-term trading stops placed near the 0.7200 round-figure mark, with bears now eyeing some follow-through weakness below the 200-hour SMA support near the 0.7170 region. A convincing breakthrough might prompt some aggressive long-unwinding trade and accelerate the slide further towards the 0.7100 mark en-route weekly lows, around the 0.7075 region.
Technical levels to watch
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