AUD/USD slipped below 0.6980 support as US Pres.Trump’s tweets dragged antipodeans down

The US President Donald Trump threatens to levy $200 billion tariffs on China goods.
A break of 0.6980 support favors bears unless recovery above 0.7000 takes place.

Anil Panchal FXStreet

The AUD/USD pair slipped beneath 0.6980 support as it flashed the fresh low since January 2019 to 0.6968 during the early Asian session on Monday.

The Aussie pair reflected to the weekend news concerning the US-China trade deal on the US President Donald Trump’s tweets.

The quote registered gains on Friday after markets rushed to equities in search of higher returns with better US employment data.

On Sunday, the US President Trump, who previously sounded very optimistic of the trade negotiations with China, threatened to increase tariffs on all China goods from 10% to 25% and also to include additional $325 billion goods into the tax bracket of 25% soon.

The reason President Trump cited for thinking to undertake such a measure is “too slow” speed of negotiation and China’s attempt to renegotiate the deal.

Reuters also reported that such a push was used by President Trump as he was told by aided that significant hurdles remain to reach a trade deal with China.

With China being the largest customer of Australia, any negative news for it could weigh heavily on the Australian Dollar (AUD).

Looking forward, April month details of Australia’s TD securities inflation, ANZ job advertisements, and China’s Caixin services PMI will be closely watched. While inflation and job data were at +0.4% and -1.7% respectively during their previous releases, China’s services PMI was 54.4 and is likely to print 52.8 figure this time.

Technical Analysis

Break of 0.6980 opens the door for the quote’s extended downturn to 0.6920 and 0.6870 rest-points ahead of highlighting 2016 lows near 0.6830.

However, an upside clearance of 0.7000 can trigger the pullback targeting 0.7030 and 0.7055.

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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