The Aussie Dollar slipped 0.26% to 0.6467 (0.6490) as risk sentiment soured while China yesterday banned meat imports from four Australian processors. While Chinese customs said it found the beef products from certain Aussie firms violated inspection requirements, it was a clear retaliatory move on Prime Minister Scott Morrison’s push for an inquiry into China’s role in the spread of Covid-19.

AUD/USD stayed under the 0.6500 resistance level, slipping to an overnight low at 0.64320 before rallying to 0.6467 at the New York close. Today the spotlight for Aussie traders falls on the RBNZ rate decision and its impact on the Kiwi. The ongoing US-China trade war as well as growing fears of a fresh rise of coronavirus cases in Germany, Korea and China following an easing in lockdown restrictions will weigh on the Aussie Battler. Market positioning though supports the Aussie. Speculative short Aussie bets were trimmed in the latest COT report (week ended May 5) to -AUD 33,455 contracts from -AUD 37,741. While the number is smaller, it is still 50% of the yearly high.

AUD/USD has immediate support at 0.6430 followed by 0.6400 and 0.6370. Immediate resistance can be found at 0.6500 followed by 0.6540 and 0.6580. Look for the Aussie to remain pressurised within a likely 0.6410-0.6510 range today. Look to trade either extreme, we could see some volatility ahead.