Originally published by AxiTrader
There is a perfect storm of issues facing the Australian dollar this week. The weakness of the yuan, lower industrial commodity prices and rising US yields are all adding to the ongoing trade conflict between the US and China to cause the extended downside in Australian dollar pairs. The start of the week shows no sign of any of those issues going away, which means the likes of AUD/USD, EUR/AUD and AUD/JPY have all seen their fair share of big moves.
Monday’s session saw one of the worst performing days for both Australian stocks and the dollar since March, as it nothing seems to be working to relieve the pressure at the moment. AUD/USD fell down towards 0.70 before rallying during European trading hours on the back of whipsaw nature of the US dollar at the moment. The bounce from the lows will give Aussie bulls a bit of respite as it seems the 0.71 level is the anchor point for the pair at the moment, with mild resistance at 0.7090.
On the four hourly time frame EUR/AUD broke out of the channel that we had seen working for the last couple of months, before yet again falling back in European trading as the Aussie recovered. The key level here remains a retest of the descending trendline around 1.6200 and the mid S2 of the pivots at 1.6240.c