• GBP/AUD rose sharply on Friday as risk-sensitive currencies such as the Australian dollar weakened following Trump’s threat of higher tariffs on China..
• Markets were rattled after U.S. President Donald Trump issued a barrage of fiery warnings against China in response to its tougher restrictions on rare earth exports.
• In a post on Truth Social, Trump announced he is assessing a “massive” rise in tariffs on Chinese imports and ruled out the need for a meeting with Xi Jinping in two weeks, adding that multiple countermeasures are being considered.
• The outburst rattled markets and risked inflicting further damage on the already fragile relationship between the world’s two largest economies.
• Markets have been on edge since Trump’s April 2 “Liberation Day” tariff declaration, as his erratic trade approach and stop-start negotiations have stirred turbulence across global assets.
• Immediate resistance is located at 2.0639(50%fib), any close above will push the pair towards 2.0749(July 17th high).
• Immediate support is seen at 2.0422 (SMA 20) and break below could take the pair towards 2.0235(61.8%fib).
Recommendation: Good to buy around 2.0600 with stop loss of 2.0520 and target price of 2.0730
