Aussie Under Pressure
The Aussie Dollar has come under heavy selling pressure today with AUDUSD down more than 1% on the day as uncertainty hits markets ahead of Wednesday’s tariff announcement. The pause on Trump’s ‘Liberation Day’ tariffs is set to end with reciprocal tariffs due to be stepped up. Risk assets have come under heavy selling pressure today with the drop in commodities prices hurting AUD in particular.
Tariffs on Watch
Traders are concerned, that Trump might look to raise tariffs higher than they had been previously in some cases which, if seen, will be heavily bearish for risk assets. Indeed, Trump has this weekend threatened to apply an additional level of tariffs to BRICS countries in response to what he calls their ‘anti-American’ agenda. AUD’s sensitivity to these countries, due to their trade relationship, means AUD is especially vulnerable this week to a fresh drop lower.
RBA Meeting Due
Ahead of the tariff announcement, traders are also bracing for the latest RBA meeting tonight. The bank is widely expected to cut rates by a further .25% and traders will now be monitoring the bank’s guidance for signals that further easing could be seen. If the bank takes a more dovish view, in light of renewed trade risks, this should keep AUD firmly sold through the week.
Technical Views
AUDUSD
The Aussie is reversing lower within the falling edge pattern, suggesting risks of a deeper move lower if the structure breaks. Focus is now on support at .6395 which, if broken, opens the way for a deeper move towards the .6155 level.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.