The Australian dollar holds firmly in red on Thursday and extends weakness of the previous day, denting key near-term support at 0.7370 (27 July low/Fibo 61.8% of 0.7317/0.7464 upleg). Upbeat Australian trade balance data (trade surplus widened to A$1.87 B vs A$ 0.9B f/c) had little positive impact on the pair
Rising fears of intensifying US-China trade tensions, keep the Aussie, China’s sentiment liquid proxy, under increased pressure.
Fall of Chinese equities by 2% adds to negative outlook.
Bearish technical studies support the notion as momentum formed bear-cross and broke into negative territory and RSI turned south from neutral zone, as the price broke below a cluster of converged MA’s.
Firm break below 0.7370 pivot would spark fresh weakness and risk retest of key supports at 0.7317/10 (20/02 July lows respectively). Upside attempts should be capped at 0.7400 zone to keep bears intact.
Res: 0.7389, 0.7400, 0.7429, 0.7440
Sup: 0.7359, 0.7343, 0.7317, 0.7310
