Further Losses Possible for AUDUSD Price
AUDUSD price, news and analysis:
- AUDUSD looks to have broken to the downside and could be heading long-term to levels last seen in January 2016.
- As the US-China trade dispute continues to affect markets, there are concerns that Australian exports could suffer from any Chinese economic slowdown.
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AUDUSD chart bearish
AUDUSD looks to have broken to the downside from a channel that has contained the price for most of this year, suggesting there could be further losses to come.
As the chart below shows, the support line of the downward-sloping channel has now been breached. With the price already under the low set at the end of last year, there is now little support ahead of the lows around 0.6827/28 touched early in 2016.
AUDUSD Price Chart, Daily Timeframe (January 1, 2016 – September 12, 2018)
Meanwhile, to the upside, there is now trendline resistance at 0.7155, from the 20-day moving average at 0.7230 and from the 50-day moving average at 0.7311.
This technical picture is supported by the fundamentals too. Australian exports to China are likely to be hit if the US-China trade dispute damages Chinese economic growth – which is why adverse developments in the row tend to weaken it.
US President Donald Trump said Tuesday that the US was taking a tough stance with China, increasing the possibility that new levies on Chinese exports will be announced soon. His latest comments came after China told the World Trade Organization that it wants to impose $7 billion a year in sanctions on the US in retaliation for non-compliance with a ruling in an earlier trade dispute.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.