The Australian dollar bounced from the lows as the US tariffs came and markets accepted them in stride. What’s next? A light calendar leaves the focus to further trade developments. Here are the highlights of the week and an updated technical analysis for AUD/USD.
The Trump Administration announced a 10% tariff on $200 billion of Chinese goods, coming into effect on September 24. The extended communication, the relatively low tariff of 10%, and the mild Chinese reaction, with only some tariffs, allowed markets to take a breather. China is Australia’s No. 1 trading partner. The RBA Meeting Minutes maintained the neutral tone and did not imply any immediate moves.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
*All times are GMT
AUD/USD Technical Analysis
Aussie/USD escaped the abyss and made a successful break above 0.7200 (mentioned last week).
Technical lines from top to bottom:
0.7480 capped the pair in mid-July and defends the round 0.75 level. 0.7420 capped the pair twice in mid-July. 0.7360 was a low point in mid-July.
0.7310 is the low of July 2018. 0.7235 was a swing low in late August and the pair attempted to reach it in mid-September.
The round number of 0.7200 was a temporary low. 0.7150 was a stepping stone on the way down in early September. 0.7085 is the 2018 trough.
Below, we are back to levels last seen in January 2017: 0.7050 could provide some temporary defense against an assault on the round 0.70 level. Even lower, 0.6880 is the next level to watch.
