AUD/USD Monthly Chart
The Australian dollar fell sharply across the board as trade war fears flared up again on Tuesday. Reports that President Trump is considering a crack down on Chinese companies investing in the US sent stocks tumbling.
The move would put into action an emergency law to restrict Chinese investment in ‘sensitive’ emerging technologies like 5G.
Since China is Australia’s largest trading partner, the Australian dollar is highly sensitive to economic news impacting China. Anything that could hinder China’s growth could in turn reduce their demand for exports from Australia.
AUD/USD made new 2018 lows on the heels of the news and EUR/AUD rallied to its highest levels since February of 2016.
Looking at the AUD/USD monthly chart we can see a well defined uptrend line providing potential major support below.
US Q4 GDP, Pending Homes Sales and Crude Oil inventories stand out as the highlights on the economic docket for Wednesday.