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Australian Dollar Forecast: AUD/USD at Risk From US/China Trade Wars 2.0

Australian Dollar Forecast: AUD/USD at Risk From US/China Trade Wars 2.0

2020-05-15 12:32:00
Justin McQueen, Analyst
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Australian Dollar Analysis and Talking Points

Australian Dollar at Risk: Trade Wars 2.0

The Australian Dollar looks set to come into the cross-fires once again as US-China trade tensions pick up. The Trump administration has moved to block shipments of semiconductors to Huawei from global chipmakers, which in turn has seen China look to potentially respond via placing tech companies, such as, Apple and Qualcomm on an unreliable entity list. That said, risks look to be increasing to the downside for high beta currencies, particularly the Australian Dollar. Alongside this, we will be placing a close eye on the offshore Yuan (USDCNH).

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Australian Dollar Tech Levels

As downside risks grow for AUD/USD, near term focus is on 0.6400-07, which marks the 76.4% fib retracement. A closing break below opens up room for a test of the May double bottom. On the topside, given the macro backdrop bounces in the Aussie may be short-lived and thus upside to be capped from 0.6450-0.6500.

AUD/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -3% -6% -5%
Weekly 7% -8% -3%
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Implied Weekly range (0.6320-0.6530)

Support

Resistance

0.6400

-

0.6450

-

0.6370

May Double Bottom

0.6500

-

0.6350

-

0.6515

100DMA

AUD/USD Price Chart: Daily Time Frame

Australian Dollar Forecast: AUD/USD at Risk From US/China Trade Wars 2.0

Source: IG Charts

--- Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX

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

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