Australian dollar strategy, focus on the yuan! ~Strategy for October 25~

◎ Strategy and Position

AUD/USD Sell View

Currently holding a short position in AUD/USD.

Timing for adding positions”0.700” add short position.

AUD/USD 4-hour chart

AUD/USD Daily chart

◎ Focus

Chinese Yuan and stock prices

The yuan is approaching a new low against the dollar. Of course, there is concern about President Trump’s statements that could trigger currency depreciation. If it stays only as talk, it’s fine, but if actions like additional tariffs are taken, that is a concern. Chinese stocks (Shanghai Composite) show high volatility and faster declines. yuan weakness and stock weakness raise concerns about the Chinese economy.

USD/CNH daily chart

Concerns about the Chinese economy translate into Australian concerns, leading to AUD selling....

Therefore, the short view on AUD/USD is influenced by dollar strength as well.

Watch the direction of the U.S. dollar as well.

In a risk-off environment, it may be appropriate to switch from AUD/USD to AUD/JPY.

However,personally I am long-term holding, so I consider swaps and am maintaining a position in AUD/USD.