AUD/USD's turned tail after its rally off 2019's low halted at the 21-DMA and daily cloud top, as bearish risks -- mainly involving China -- reminded traders of the dangers still present.
The downside surprise and 17-year low for China's January-February industrial production nL3N2110AV nL1N2110MQ highlighted these risks, leading to a selloff in the yuan, emerging market currencies and the aussie against the greenback.
The aussie remains highly correlated to risk sensitive assets.
U.S.-Sino trade issues are also lingering in the background.
News that the Trump-Xi meeting has been pushed back to at least April nFWN211076 added further bearish pressure to AUD/USD.
The pair dived below the 10-DMA and daily cloud base, which resulted in daily and monthly RSIs turning down.
A close below the cloud and support near 0.7040 would put the 2019 low and 0.7000 barrier in play. The fall in Australia's 10-year bond yield below 2 percent and short-term rates markets pricing in RBA cuts for 2019 should temper bulls as well.
If bearish factors intensify a 0.7000 barrier break is likely.
Bears would then target the 0.6800/50 zone.
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