Chinese Ban On Australian Coal Puts Pressure On Aussie
Russell Shor | Feb 21, 2019 19:56
The below is the daily chart of the AUDUSD. Australia’s employment change m/m surprised to the upside and came in 39.1K, more than double the forecast of 15.2K. The Aussie immediately responded to the upside. However, it quickly capitulated after Reuters reported on a ban by Chinese officials of Australian coal imports at the key northern port of Dalia. We note that this story has not been corroborated by Dalian customs nor the General Administration of Customs but Trade Minister Simon Birmingham is seeking clarification from the Australian ambassador in Beijing.
Moreover, the Australian 2 yr. note is declining and is at 1.70%. The shorter-term note is sensitive to RBA policy and is certainly reflecting its dovish stance. This is likely to add further downside pressure to the Aussie dollar. We note that the RSI(9) below, a measure of underlying momentum, has turned bearish by dipping below 50 (blue rectangle). This may suggest that the 2-3 leg marked on the chart is corrective in nature and that the next impulse move may be downwards.
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