News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Credit rating agency Standard & Poor's is due to give its sovereign credit rating update on Germany today ahead of weekend national elections
  • RT @BIS_org: Since the early 1990s, changes in the #MonetaryPolicy stance have affected a rather narrow set of prices – mostly in the servi…
  • Huawei's CFO Meng Wanzhou reached deal with the US Dept of Justice to return her to China - Dow Jones
  • Cleveland Fed President Loretta Mester says: - sees US GDP in 2022 between 3.75 and 4% - Supports tapering in November and concluding over the first half of 2022 - After liftoff, accommodative policy needed for some time
  • Fed Chairman Jerome Powell doesn't comment on the growth forecast or monetary policy in his introductory remarks
  • Kansas City Fed President Esther George says: - The labor market friction is fading barring a resurgence of virus - A 'normal' economy is likely to remain elusive for some time - Asset buying effects complicate the judging rate change plan
  • The risk rally that charged the S&P 500 and brethren post-FOMC has stalled into Friday's open. DailyFX's @JohnKicklighter discusses what is driving markets post Fed👇 https://t.co/qNuVaDrZPe
  • 🇺🇸 New Home Sales MoM (AUG) Actual: 1.5% Previous: 6.4% https://www.dailyfx.com/economic-calendar#2021-09-24
  • China has announced that they will be cracking down on Cryptocurrency mining and while this has been a reoccurring theme, regardless of that fact Get your market update from @JMcQueenFX here:https://t.co/FluWtTTM93 https://t.co/GnBLLucMs3
  • Looks like they couldn't hold the 8.8000 line for $USDTRY. Record high exchange rate (favoring Dollar over Turkish Lira) despite a still-17.75 percentage point differential in their benchmark rates... https://t.co/7FrlF8El1O
Australian Dollar Outlook Bearish on Rising Trade War Tensions

Australian Dollar Outlook Bearish on Rising Trade War Tensions

Justin McQueen, Strategist

AUD Analysis and News

  • AUD Outlook Dampened by Rising US-China Trade War Tensions
  • AUD Short Bets at the Highest Level Since December 2015

Escalating Trade War Tensions Dampens AUD Outlook

Increasing concerns over a full-blown trade war between the US and its largest trading partners (China and the EU) have been at the forefront of investors’ minds. The tit-for-tat trade spat with the US and China have shown no significant signs that either party will back down, as such, the Australian Dollar has come into the crossfire, given its large exposure to the Chinese economy and with trade war uncertainty set to continue in the months ahead, the AUD could grind lower. Additionally, AUDUSD downside is clear in option markets with 1-month risk reversals highlighting that AUD put bias is at the highest since February.

Background: Impact of Trade Wars click here

CFTC Speculative Positions Shows AUD Shorts Increased

The negative sentiment stemming from rising trade war tensions has been reflected in market positioning with the latest CFTC speculative data showing that investors are the most bearish on the Australian Dollar since December 2015, which in turn has seen net AUD shorts equating to $3.181bln.

Australian Dollar Outlook Bearish on Rising Trade War Tensions

Source: Thomson Reuters (CFTC Speculative Positioning)

AUDUSD PRICE CHART: DAILY TIME FRAME (February 2017-June 2018)

Australian Dollar Outlook Bearish on Rising Trade War Tensions

Chart by IG

AUDUSD currently holding above 0.7400, however with RSI indicators shifting towards further downside, a test of the 0.7400 handle looks to be on the cards. AUD bears looking to make a run in on 0.7330-40 support zone, whereby a close below could to a move towards 0.7200.

According to IG Sentiment, AUDUSD may continue to fall. For more information of client positioning, click here

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES