Australian dollar is taking a hit after PBOC’s devaluation of yuan by most since June 2016.
The PBOC raised the yuan reference rate by 605 pips to 6.7671 today - the biggest single-day jump in over two years.
PBOC's move follows Trump's comments overnight that 'Fed' rate hikes and higher cost of borrowing would nullify the work his administration has done.
PBOC's move indicates the world’s two biggest economies are likely moving towards a full-fledged currency war.
AUD/JPY a proxy for risk is bound to see further slide. Technical indicators also are on verge of turning bearish.
The pair is currently holding 20-DMA support at 82.26. Decisive break below will accentuate the slide.
Support levels - 82.50 (100-DMA), 82.26 (20-DMA), 80.75 (channel base)
Resistance levels - 83.11 (converged 5-DMA and 110-EMA), 83.92 (July 19 high), 84.53 (June 7 high)
Stay short on decisive break below 20-DMA, place stops at 83.15, target 80.75
The PBOC raised the yuan reference rate by 605 pips to 6.7671 today - the biggest single-day jump in over two years.
PBOC's move follows Trump's comments overnight that 'Fed' rate hikes and higher cost of borrowing would nullify the work his administration has done.
PBOC's move indicates the world’s two biggest economies are likely moving towards a full-fledged currency war.
AUD/JPY a proxy for risk is bound to see further slide. Technical indicators also are on verge of turning bearish.
The pair is currently holding 20-DMA support at 82.26. Decisive break below will accentuate the slide.
Support levels - 82.50 (100-DMA), 82.26 (20-DMA), 80.75 (channel base)
Resistance levels - 83.11 (converged 5-DMA and 110-EMA), 83.92 (July 19 high), 84.53 (June 7 high)
Stay short on decisive break below 20-DMA, place stops at 83.15, target 80.75