Australian Dollar Slide Continues As China Chastises U.S

Australian Dollar Slide Continues As China Chastises U.S

AUD/USD continues to lose ground this week. Currently, the pair is trading at 0.6878, down 0.21% on the day. On the release front, it’s a light day. There are no Australian releases and only one major event in the U.S. The UoM Consumer Sentiment is expected to rise to 97.8.

It’s been a rough week for the Aussie, which has fallen 1.75% this week. This is the sharpest weekly drop since early February. The currency has been hit hard, as risk appetite has soured over the escalating trade war between the U.S. and China. The U.S. raised tariffs on $200 billion in Chinese goods late last week, and the Chinese responded this week with tariffs on $60 billion in U.S. products. On Thursday, China accused the U.S. of manipulating the talks, after the U.S. blacklisted Huawei, a Chinese telecom company. As well, an escalation in tensions between the U.S and Iran, which could lead to an interruption in oil shipments, has raised crude prices and sent equity markets sharply lower on Friday.

Australians head to the polls on Friday in a very tight race between the center-right Liberals and the left-leaning Labor. After years of a booming economy, Australia has been gripped by a slowdown, as the global trade war and a weaker Chinese economy has damaged the export-reliant Australian economy. The markets are hopeful that the winner will be able to form a majority government that will be able to serve a full term. A close finish between the parties could result in a minority government, and the resulting uncertainty could dampen sentiment towards the struggling Australian dollar.

AUD/USD Fundamentals

Friday (May 17)

  • All Day – Australian Parliamentary Elections
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 97.8
  • 10:00 US Preliminary UoM Inflation Expectations
  • 10:00 US CB Leading Index. Estimate 0.2%
  • 13:40 US FOMC Member Clarida Speaks

*All release times are DST

* Key events are in bold

AUD/USD for Friday, May 17, 2019

AUD/USD Chart

AUD/USD Chart

Open: 0.6892 High: 0.6897 Low: 0.6873 Close: 0.6878

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.67686 0.6744 0.6825 0.6968 0.7085 0.7190

AUD/USD has posted small losses in the Asian and European sessions

  • 0.6825 is providing support
  • 0.6968 is the next resistance line
  • Current range: 0.6825 to 0.6968

Further levels in both directions:

  • Below: 0.6825, 0.6744 and 0.6686
  • Above: 0.6968, 0.7085, 0.7190 and 0.7240

Original post

Australian Dollar Slide Continues As China Chastises U.S

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