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AUD/USD takes a step back as trade headlines start to eat away at risk appetite

5/24/2018, 9:51:03 AMBasics of Trading
AUD/USD takes a step back as trade headlines start to eat away at risk appetite

The Aussie tripped lower against the US Dollar in the early Asia session for Thursday following statement by the US that they are seeking yet more tariffs, this time targeting foreign vehicles. The AUD/USD slipped to 0.7550 on the news, but the pair seems to be recovering and is trading back into 0.7565.

Little is on the docket for the Aussie for Thursday, but markets are still finding some moves in Asia following tense headlines from the US. President Trump has instructed the US Department of Commerce to make a formal investigation into foreign vehicle imports, so that the US can impose hefty tariffs on foreign cars under the guise of national security. Markets knocked back briefly on the news as the early week's hopes of a cooldown in trade rhetoric begins to flub.

AUD/USD levels to watch

As FXStreet's own Valeria Bednarik noted earlier, "the pair is currently below the 0.7565 Fibonacci resistance, but the risk leans to the upside, as, in the 4 hours chart, the pair held above its 100 SMA and is currently battling to overcome a bullish 20 SMA, while technical indicators stand within positive territory, the RSI actually advancing at around 53. Further recoveries above the mentioned Fibonacci resistance should see the pair extending its recovery up to the 0.7620 region, the 50% retracement of its latest weekly decline."

Support levels: 0.7520 0.7470 0.7435  

Resistance levels: 0.7665 0.7590 0.7620