- The U.S. hikes tariff rate on Chinese imports to 25%.
- RBA says trade tensions remain a downside risk to the global outlook.
- US Dollar Index stays below 97.50 ahead of inflation data.
After making some mild fluctuations in the Asian session, the AUD/USD pair turned quiet in the European session and has gone into a consolidation phase near the 0.70 mark. As of writing, the pair was up 10 pips on the day at 0.6998.
Earlier today, the United States hiked the tariff rate on $200 billion worth of Chinese goods to 25% from 10% as Thursday's talks in Washington failed to lead to a resolution in the U.S.-China trade dispute. Although this development didn't stir the markets, investors are likely to react to how China decides to retaliate.
“We do not know details of how and when China will retaliate. But I think they will try to be measured on the surface, but start to halt purchases of US agricultural goods again. Tariffs may go up but China will aim to use measures that hurt the US but not themselves. That is why quantitative measures are better since they can buy agricultural goods elsewhere,” Danske Bank analysts said.
Meanwhile, in its monetary policy statement, the RBA reiterated that trade tensions were a significant downside risk to the global outlook. Regarding the policy outlook, the bank didn't deliver any surprising remarks.
In the second half of the day, inflation data from the U.S., which is expected to show the annual core CPI edging higher to 2.1% in April, will be looked upon for fresh impetus. Ahead of the data, the US Dollar Index is posting small losses on the day near 97.35.
Technical levels to watch for
|Today last price||0.6998|
|Today Daily Change||0.0010|
|Today Daily Change %||0.14|
|Today daily open||0.6988|
|Previous Daily High||0.6999|
|Previous Daily Low||0.6964|
|Previous Weekly High||0.707|
|Previous Weekly Low||0.6984|
|Previous Monthly High||0.7206|
|Previous Monthly Low||0.6988|
|Daily Fibonacci 38.2%||0.6986|
|Daily Fibonacci 61.8%||0.6977|
|Daily Pivot Point S1||0.6968|
|Daily Pivot Point S2||0.6949|
|Daily Pivot Point S3||0.6933|
|Daily Pivot Point R1||0.7003|
|Daily Pivot Point R2||0.7019|
|Daily Pivot Point R3||0.7038|