AUD/USD drops lower to print fresh lows

  • AUD/USD gathers momentum to the downside, but technically now overstretched on an hourly basis.
  • AUD/USD is currently trading at 0.6891, having printed a fresh low of 0.6886, albeit still with potential towards 0.6850's, levels pointed out by analysts at Commerzbank in the prior update as follows:
  • AUD/USD: Bears in control despite risk-on U.S. session

AUD/USD is continuing to bleed out, despite a risk-on session in the U.S. today. We are heading towards the Wall Street close and the indexes have started to tail off, likely pressured by short-term speculators pulling out of the trades as the U.S. yields flake out as well. 

The U.S. session and indexes shrugged off the threat of trade war escalations at the start of the day, with investor appetite beefed up by positive earnings and U.S. economic data. However, the chickens may have come home to roost at the end of the day, and we are reminded by Commerce Sec. Wilbur Ross who was speaking earlier that trade wars are indeed escalating, saying that the Huawei order will be effective starting tomorrow - The announcement fueled a dip in stocks which eventually morphed into a low for the latter part of the afternoon's session. 

AUD/USD levels

Elsewhere, in the FX space, USD/CNH has come under pressure as well which was the final blow to the Aussie that can likely keep bleeding based on fundamentals, but technically, AUD/USD is now oversold on a short term basis and likely needs correction before sinking lower towards the said target down in the 0.6850's



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