AUD/USD extends losses below 0.7100 as the Aussie remains under pressure

• Aussie hit after a Chinese port banned coal from Australia. 
• AUD/USD reversed from 2-week highs to 1-week lows in a few hours. 

The AUD/USD pair reversed sharply, falling from 2-week highs to 1-week lows in a few hours. The move lower was triggered during the Asian session following a report that China’s Dalian port banned coal from Australia. During the US session, the Aussie resumed the decline. 

Earlier today, the pair peaked at 0.7205, the highest level since February 6. Since then it has fallen more than a hundred pips. The better-than-expected Australian employment report was completely offset by the Chinese news. 

On US hours, the US dollar gained momentum and rose across the board, particularly against the Aussie, that remains among the worst performers. AUD/USD dropped to 0.7075, the lowest in a week. As of writing, trades slightly above the low, under pressure.

The technical outlook points to further losses, and it could test February lows located around the key support level of 0.7050/55. A break lower would add more negative pressure. 

“It seems likely that other Chinese ports may continue to accept Australian coal. Nevertheless, it is our view that a plethora of downside risks will force the RBA to cut interest rates this year. As a consequence we maintain our view that AUD/USD has further to fall”, wrote Rabobank analysts. They forecast AUD/USD at 0.68 on a 12-month view. 

A sharp drop in AUD/NZD

The Aussie sell-off pushed AUD/NZD sharply to the downside and recently printed fresh lows below 1.0400. The pair reversed from weekly tops to 3-day lows, breaking key short-term support levels. Now a test of the YTD low at 1.0365 seems likely.