AUD/USD – Plunge in Chinese Yuan Could See Corrective Move South

The Australian Dollar finished its New York session with little change to 0.7140 from 0.7130 after peaking at 0.71831, 15-month highs. Escalating tensions between the US and China soured risk after news that the US State Department ordered Beijing to shut its consulate in Houston within 72 hours. China vowed to implement “firm countermeasures.” Wall Street stock futures slid in early Asia.

AUDUSD ForexLiveChartsUK - H1 - 23 July 2020
AUDUSD ForexLiveChartsUK – H1 – 23 July 2020

Yesterday, Australia’s June Retail Sales missed forecasts of 7.1%, falling to 2.4% and well below May’s 16.9%. Today sees the release of NAB’s Quarterly Business Confidence Index which is forecast at -8 from the previous quarter’s -11. Australia’s second largest city, Melbourne will see people require to wear masks in public today. The economic impact of the coronavirus is set to be announced by the Prime Minister today.

The plunge in the Offshore Chinese Yuan against the US Dollar (USD/CNH) will see the Aussie Battler pressurised. AUD/USD has immediate support at 0.7110 (overnight low 0.7112) followed by 0.7070. Immediate resistance lies at 0.7150 followed by 0.7180. Strong resistance can be found at 0.72 cents. The Aussie needs a breather, which lies just around the corner. Look for a likely range today of 0.7060-0.7160. Prefer to sell rallies.

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