Market sentiment returned to risk in the Asian session today following reports of re -strained relations between China and Australia over their economic activities.
China will cancel all planned activities under the China-Australia Strategic Economic Dialogue which is seen as a retaliation against Australia following the pressure on the issue of human rights violations in China in the past.
The decision was also made after Australia canceled the Belt & Road agreement signed by China and the Victorian government.
The impact was felt by the Australian dollar as tensions between the two trading partners warmed again.
On average, the Aussie dollar as a high -yielding currency will depreciate if risky market sentiment following investor concerns shifts to safer assets.
After a bullish pattern was displayed on the AUD/USD pair chart for Wednesday’s trading yesterday, the price has made a decline in the Asian session this morning.
The decline of over 50 pips was seen to be discontinued before the price made a resumption of gains at the beginning of the European session.
After declining almost to the level of 0.77000, the price moves back up above the support level of Moving Average 50 (MA50) on the 1 hour time frame of the price movement.
The rise in prices is likely to be driven by the depreciation of the US dollar while investors are wary of US dollar trading ahead of the US NFP jobs report on Friday.
If the rise is successfully resumed, the price will cross the level of 0.77660 reached at the beginning of the week to record a weekly high.
The next resistance zone of 0.78100 will be the target that will be tested by the price after the price declined from that zone last week.
On the other hand, if the price continues to fall lower will head to the focus zone in the range of 0.76700-0.76500 to test the RBS zone (resistance become support).
The lower decline could reach up to the support zone of 0.75700 while recording the latest 5 -week low.
