AUD/USD Price Analysis: Teasing a rising wedge breakdown amid US-China woes

AUD/USD remains sold-off into dovish RBA tone and US-China woes over Taiwan.
RBA hikes key rates by 50 bps but says it's not on a pre-set tightening path.
A potential rising channel breakdown on the 1D targets 21 DMA at 0.6873.

Dhwani Mehta FXStreet

AUD/USD is holding the lower ground above 0.6900, losing nearly 1.50% on the day, as the AUD bulls continue to face a double-whammy this Tuesday.

Risk-aversion remains at full steam, as markets stay anxious ahead of the expected visit of US House of Representatives Speak Nancy Pelosi to Taiwan around 1430 GMT. The US remains unintimidated by the Chinese threats but Beijing and Taipei have stepped up their military responses in a show of strength, as Pelosi visits the self-ruled island claimed by the dragon nation.

Another reason for the aussie sell-off is the dovish signal from the Reserve Bank of Australia (RBA) during its monetary policy meeting. The RBA raised the key rate by 50 bps to 1.85% this month, as widely expected. However, the central bank noted that they are not on a pre-set tightening path, in a way abandoning the forward guidance, which triggered a fresh downfall in the aussie dollar.

All eyes now remain on Pelosi’s arrival to Taipei, which could see a fresh risk-aversion wave spelling out in the early American session. Meanwhile, the pair also remains exposed to downside risks, given that it is on track to confirm a rising wedge breakdown on the daily chart.

AUD/USD has breached the horizontal 50-Daily Moving Average (DMA) support at 0.6966, which has opened up the additional downside.

A daily closing below the rising trendline support at 0.6952 will validate the bearish channel.

The next relevant downside cap is pegged at 0.6873, which is the horizontal 21 DMA.

The 14-day Relative Strength Index (RSI) is attacking the midline, suggesting that there is more room southwards.

AUD/USD: Daily chart

Recapturing the 50 DMA is critical to initiating any meaningful recovery towards 0.7000.

The intraday high of 0.7034 will emerge as a tough nut to crack for AUD bulls.

AUD/USD: Additional levels to consider

AUD/USD

Overview
Today last price	0.6920
Today Daily Change	-0.0099
Today Daily Change %	-1.41
Today daily open	0.7019

Trends
Daily SMA20	0.6871
Daily SMA50	0.6969
Daily SMA100	0.7121
Daily SMA200	0.7173

Levels
Previous Daily High	0.7048
Previous Daily Low	0.6968
Previous Weekly High	0.7033
Previous Weekly Low	0.6879
Previous Monthly High	0.7033
Previous Monthly Low	0.668
Daily Fibonacci 38.2%	0.7017
Daily Fibonacci 61.8%	0.6999
Daily Pivot Point S1	0.6975
Daily Pivot Point S2	0.6932
Daily Pivot Point S3	0.6895
Daily Pivot Point R1	0.7055
Daily Pivot Point R2	0.7092
Daily Pivot Point R3	0.7135

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.