- Australian political turmoil, looming US tariffs deadline knocks-off the Aussie.
- Technical set up points to easing upward momentum, as corrective rally fades.
The bearish momentum in the AUD/USD pair regained strength in the Asian trades this Thursday, as the Aussie was heavily sold-off into ongoing Australian political turmoil.
The political climate down under deteriorated on reports that the country’s PM Turnbull will not contend leadership vote, as heads into a second leadership challenge later today amid a lack of support. Also, the news that the Australian Finance Minister Cormann tendered his resignation, added to the political woes and exacerbated the pain in the Aussie.
The Australian political crisis fuels speculations that the Reserve Bank of Australia (RBA) could keep rates on hold for a longer period than markets’ expectations. Further, the sentiment around the higher-yielding also remains weighed down by the looming US tariffs on the Chinese goods that take effect on Thursday, as the US seeks to collect 25% duties on China’s imports.
Looking ahead, all eyes will remain on the US-China trade developments and US dollar price-action until the releases of the US manufacturing PMI and new home sales data, which may offer some short-lived trading impetus. Also, in focus remains the Day 1 of the annually held Jackson Hole Economic Policy Symposium for further momentum on the prices.
AUD/USD Technical Levels
Resistances: 0.7328 (5-DMA), 0.7350 (psychological levels), 0.7377 (50-DMA).
Supports: 0.7253 (Aug 17 low), 0.7200 (round number), 0.7162 (Jan 2017 lows).
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