Aussie dips below 200DMA on concerns of negative impact from trade deal
The Australian dollar dipped below 200DMA support (0.6890) on Wednesday, after details of US/China trade deal which is going to be signed later today were digested.
Concerns that the deal could hurt Australian economy, increased pressure on Aussie and generated initial signal of reversal after recovery was strongly rejected on Monday and Tuesday’s action ended in Doji candle.
Rising bearish momentum and south-heading RSI on daily chart add to negative signals which need confirmation on close below 200DMA that would open way towards cracked key supports at 0.6860/50 (Fibo 61.8% of 0.6754/0.7032 / 8-10 Jan higher base).
Downside risk would ease if fresh bears fail to close below 200DMA, but near-term action would remain in extended sideways mode as long as pivotal barrier at 0.6919 (Fibo 38.2% of 0.7032/0.6849 fall).
Res: 0.6904; 0.6919; 0.6940; 0.6962
Sup: 0.6877; 0.6865; 0.6849; 0.6825