- Trade war headlines rock the apple cart and weigh on the Aussie.
- AUD/NZD drops to 200-hour moving average with eyes on a 61.8% Fibonacci retracement.
AUD/NZD has been weeker into month-end, falling from the 1.08 handle to 1.0740 and meting the 200-hour moving average which has acted as a robust level of support. Overnight, trade headlines soured the mood and weighed on the Australian Dollar. Headlines stated that Chinese officials were casting doubts over reaching a comprehensive long-term trade deal with the US. Chilean President Sebastian Pinera dropped a spanner into the works when he announced Wednesday that the country had cancelled the Asia-Pacific Economic Cooperation summit Nov. 16-17.
Trade war headlines turning sour again
The consensus was that Trump and Xi-Jinping would still ink a deal together, at some stage and somewhere, but today's feelings have shifted somewhat. Bloomberg reported, citing “Chinese officials”, that US-China trade negotiations beyond Phase 1 were unlikely to progress without current tariffs being removed, making for a risk-off month-end – Also, weaker China ISM added to the sense of unease and consequently, AUD/USD slipped from 0.6920 to 0.6890 and the cross has bared some of the brunt of it.
What makes matters worse, is that, fo far, and as reported by Bloomberg, "U.S. Trade Representative Robert Lighthizer and his team, which declined to comment, have been adamant that the duties on $250 billion in Chinese goods -- imposed early in the trade war -- be maintained over the long term as a way to enforce any commitments China makes."
AUD/NZD levels
The bears are in the driving seat at this juncture and a break of the 200-HMA opens risk towards a 61.8% Fibonacci retracement at 1.0725. On the upside, 1.0790 guards the recent tops in the 1.0820s.
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