AUD/USD feels the heat as Yuan and AUD/JPY slide
The AUD/USD pair is likely being dragged lower by Chinese Yuan and AUD/JPY pair.
At press time, the AUD/USD is trading at 0.7370, having clocked a low of 0.7361 and a high of 0.7398 earlier today.
AUD, which is widely considered as a proxy for China, is losing altitude, possibly due to Yuan depreciation. The USD/CNY pair rose to 6.5830 today - the highest level since December 2017. It appears as though China is weakening its currency in order to help the economy absorb shocks from Trump's trade war.
Further, the AUD/JPY is on the retreat likely due to increased demand for anti-risk JPY amid trade war fears. The selling in AUD/JPY could be hurting the AUD/USD.
Also, on the data front, there is little or no good news that would cheer up the AUD. Chinese industrial profits for May came in at 21.1 percent year-on-year following a 21.5 percent rise in April.
Looking ahead - the AUD/USD will likely continue tracking the action in the Chinese Yuan and AUD/JPY pair. Risk reset may stall the slide in the AUD.
AUD/USD Technical Levels
Support: 0.7345 (June 21 low), 0.7327 (61.8% Fib R on Jan 2016 low - Jan 2018 high), 0.73 (psychological level).
Resistance: 0.7401 (100-hour moving average), 0.7444 (June 22 high), 0.7476 (May 30 low).