Reports that the Trump White House plans to announce fresh tariffs on Chinese imports to the U.S. have the capacity to upset the strong risk rally seen over the past week nW1N1QS01D.
Investors had somehow managed to put the US-China trade tensions in the rear-view mirror and the report after Tuesday's New York close on U.S. plans to impose 10% tariffs on another $200 billion of Chinese imports seriously hampers that optimistic view nL1N1U620O.
The AUD was a key beneficiary of the market's optimism, with the AUD/USD rising 2.2 percent since the July 2, 0.7311 low.
An early indication of the market's angst over the revival of trade war fears was an initial 0.84 percent fall in S&P futures in Asia.
How China and AXJ markets react today will determine the extent of the AUD/USD decline from the double-top formed at 0.7484.
A break below the 10-day MA at 0.7403 would warn a short-term top is in place and a deeper move lower is likely.
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