Australian Dollar Surges on Tariff Delay, US-China Trade Talks
AUSTRALIAN DOLLAR JUMPS AS US-CHINA TRADE WAR TALKS RESTART, TRUMP DELAYS TARIFFS
- The Australian Dollar skyrockets driven by positive US-China trade war headlines
- AUDUSD & AUDJPY are posting hefty gains but face key levels of technical resistance
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The Australian Dollar is among the best performing currencies during Tuesday’s trading session owing to the latest surge in risk assets. AUDUSD and AUDJPY – currently higherby 0.72% and 1.92% respectively – jumped on the back of fresh US-China trade war developments which detailed the restart of negotiations between officials and the delay of additional tariffs threatened by President Trump.
AUDUSD PRICE CHART: 4-HOUR TIME FRAME (JULY 16, 2019 TO AUGUST 13, 2019)
Spot AUDUSD now approaches technical resistance posed by the 38.2% Fibonacci retracement of the currency pair’s decline from its July swing high and year-to-date low printed earlier this month. The bearish trendline extending from the lower highs marking the aggressive slide down from 0.7082 in addition to AUDUSD’s high last week around the 0.6823 could also serve as technical resistance.
AUDUSD PRICE CHART: DAILY TIME FRAME (DECEMBER 30, 2018 TO AUGUST 13, 2019)
Looking to the daily chart, technical confluence around 0.6820-0.6835 which may prove difficult for spot prices to overcome is also revealed by resistance posed by the 23.6% Fib of AUDUSD’s 2019 trading range and June swing low. Yet, positive divergence hinted at by the MACD and RSI rebound out of oversold territory are both constructive developments for AUDUSD bulls. The positive US-China trade war development could cause traders to unwind lofty Fed rate cut bets, however, which remains a downside risk for spot AUDUSD price action.
AUDJPY PRICE CHART: DAILY TIME FRAME (DECEMBER 23, 2018 TO AUGUST 13, 2019)
The Australian Dollar’s rebound is more visible in spot AUDJPY, which is unsurprising given the currency pair’s largely sentiment-driven price action. The latest influx of risk appetite has bolstered the Aussie and pushed AUDJPY back above the 72.000 mark. Spot AUDJPY now faces technical resistance from the 23.6% Fibonacci retracement level of the forex rate’s year-to-date trading range. If this zone can be topped, AUDJPY bulls could quickly target the 74.000 handle in an attempt to claw-back recent downside as long as US-China trade war optimism and risk appetite returns to the market.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.