AUD/USD Review: improving indicators offer respite from tariff sell-off
- Aussie slips on trade headlines, regains footing after improved West Survey reading.
- Further tariffs to be announced between the US and China as trade war concerns resurface through the broader market.
The AUD/USD is catching some minor lift following a better-than-expected Westpac Confidence Survey, and the pair is trying to build a floor from 0.7420 after slipping towards 0.7400 on trade headlines.
Australia's West Consumer Confidence Survey printed at a healthy 3.9% after coming in at 0.3% in the previous period as consumers begin to allow themselves a glimmer of hope for Australia's economic health looking forward. This was the best reading of the sentiment indicator since November of 2013, when the survey clipped in at 8.0%. As Westpac noted, "much of the improvement over the last year reflects a more balanced growth profile across states with stabilising conditions in the mining sector driving a recovery in Queensland and WA."
Risk appetite is still in full-reverse mode after the US formally revealed that they plan to announce further tariffs on $200 billion USD worth of Chinese imports, and trade angst has returned to broader currency markets after a few days of relative calm after the US and China enacted round-turn tariffs on each other last Friday.
Early Wednesday still has Home Loans figures coming up shortly at 01:30 GMT, and a surprise positive reading could help spur Aussie traders to step back into the buy side.
Aussie bulls made a second attempt to push for the 0.7500 key barrier recently, but momentum slowed prematurely and the announcement of more US-China tariffs to come has sent risk appetite reeling, cementing a softening position for the AUD. The 50- and 200-period MAs have also accelerated a bearish crossover on the lower timeframes, suggesting that bulls are likely to continue pulling back from their failure to capture 0.7500.
| Spot rate: | 0.7420 |
| Relative change: | -0.38% |
| High: | 0.7451 |
| Low: | 0.7411 |
| Trend: | Bearish |
| Support 1: | 0.7400 (Major technical level) |
| Support 2: | 0.7380 (June 26th low) |
| Support 3: | 0.7310 (current 2018 low) |
| Resistance 1: | 0.7485 (current week high; 200-period H4 SMA) |
| Resistance 2: | 0.7600 (major technical level) |
| Resistance 3: | 0.7674 (previous swing high) |
AUD/USD Chart, 15-minute
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
