AUD/USD Price Analysis: Breaks monthly support line on fresh US-China tension

AUD/USD drops around 15-pips following the news suggesting Beijing’s readiness for a military drill in the South China Sea.
Bearish MACD, break of short-term key support favor sellers.
Eight-day-old resistance line adds to the upside filters.

Anil Panchal FXStreet

AUD/USD prints 0.32% intraday losses, currently heavy near the day’s low of 0.7684, ahead of Tuesday’s European session. In doing so, the aussie pair drops below an upward sloping trend line from December 28 amid bearish MACD signals.

The pair recently got sold after news crossed wires that China will conduct military drills in the South China Sea amid tensions with the US. The dragon nation seems in a mood to escalate the Sino-American tussle after the US aircraft carrier group recently entered the disputed waters.

Read: S&P 500 futures drop further as China says to conduct military drills in South China Sea

Despite the quote’s sustained downside break of the previous support line and a risk-off mood, 200-bar SMA near 0.7665, followed by the monthly low around 0.7640, will challenge the AUD/USD sellers.

In a case where the AUD/USD bears dominate past-0.7640, December 28 low near 0.7560 becomes the key support to watch before the previous month’s bottom surrounding 0.7460.

Meanwhile, an upside bounce beyond the previous support line, now resistance, near 0.7700 threshold, will have to cross a short-term falling resistance line, currently around 0.7760 to recall the AUD/USD buyers.

AUD/USD four-hour chart

Trend: Further weakness expected

Additional important levels

Overview
Today last price	0.7689
Today Daily Change	-23 pips
Today Daily Change %	-0.30%
Today daily open	0.7712

Trends
Daily SMA20	0.7724
Daily SMA50	0.7563
Daily SMA100	0.7369
Daily SMA200	0.7133

Levels
Previous Daily High	0.7748
Previous Daily Low	0.7682
Previous Weekly High	0.7783
Previous Weekly Low	0.7658
Previous Monthly High	0.7743
Previous Monthly Low	0.7338
Daily Fibonacci 38.2%	0.7708
Daily Fibonacci 61.8%	0.7723
Daily Pivot Point S1	0.768
Daily Pivot Point S2	0.7648
Daily Pivot Point S3	0.7614
Daily Pivot Point R1	0.7746
Daily Pivot Point R2	0.778
Daily Pivot Point R3	0.7811

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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