This is why AUD/USD bears need to watch USD/CNH
Updated
Bets are back on for the RBA to cut, with markets having now fully priced in three 25bp cuts beginning in April. Weak GDP was the culprit, which leaves the Aussie susceptible to further weakness should incoming data continue to deteriorate. However, Aussie bears may also need to factor the yuan into the equation.
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AUD/USD has breached the August low, but support has since been found at the 2022 bullish trendline. News of a change of policy from China's Politburo prompted a strong rally in China, which helped AUD/USD rally from that key trendline.
Meanwhile, USD/CNH remains below, which buys AUD/USD more time above said support levels for now.
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