The AUD/USD came under pressure in early trading after China announced that it was raising the required reserve ratio for the nation’s banks. The Asian power has started to take steps to cool its economy as inflation fears rise, which will weigh on the growth outlook for Australia. On a daily chart we have started to see a head & shoulders formation develop which points to downside risks for the pair. Therefore, we will look to tale a short position below 0.9650 with a target of the 100-Day SMA at 0.9363.
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