AUDUSD Tumbles under 0.7400 as China’s Stocks Nosedived08 July, 2015 by Aayush Jindal in Market Analysis
- Aussie Dollar is under bearish pressure, as Chinese stock market tumbled with China’s Shanghai Composite Index falling 8%.
- AUDUSD traded to a new weekly low of 0.7391 and breached an important support area of 0.7400.
- In Japan, the Current Account released by the Ministry of Finance came in at ¥1,880.9B in May 2015, higher compared with the forecast of ¥1,542.0B.
AUDUSD Technical Analysis
The Aussie Dollar traded lower and breached an important support area of 0.7400 against the US dollar during the Asian session. There was a lot of bearish pressure witnessed that ignited a downside reaction, but later the AUDUSD pair managed to come back above 0.7400.
However, there is a bearish trend line formed on the hourly chart, which stalled the upside in the pair on many occasions. The recent failure was also around the highlighted trend line which ignited a down-move. Currently, the pair is around the 23.6% Fib retracement level of the last drop from the 0.7531 high to 0.7391 low. It might struggle to trade above the mentioned fib level, but if there is a break, then the bearish trend line could come into action one more time.
On the downside, the last low of 0.7391 is seen as a support area. A break below the same may perhaps take the pair towards 0.7360. The hourly RSI is below the 50 level, pointing towards the amount of bearish pressure on the pair.
In short, the AUDUSD pair remains in a downtrend and more losses cannot be discarded as long as the highlighted bearish trend line is valid and active.
Japanese Current Account
Earlier during the Asian session, the Japanese Current Account, i.e. a net flow of current transactions, including goods, services, and interest payments into and out of Japan was released by the Ministry of Finance. The market was expecting a reading of ¥1,542.0B in May 2015. However, the outcome was higher compared with the forecast, as the Japanese Current Account came in at ¥1,880.9B.
Moreover, the Trade Balance report was also released by the Customs Office. The report mentioned that there was a trade deficit of ¥-47.3B in May on BOP basis in May 2015, compared with the previous deficit of ¥-146.2B.