There is certainly a risk-off feeling in the air today as it is growing less likely that a US-China trade deal is going to happen anytime soon.

The headlines overnight were all suggesting that he would still be raising tariffs if a deal was not on the cards. At the same time, China is growing increasingly frustrated about the fact that the tariffs are not getting wound back and all of this is once again coming to a head.

This has been the style in which these talks have progressed in the past. There is confidence, that slowly gets eroded, then markets sell-off, before a new ‘mini-deal’ is struck.

So with that in mind, it would not be surprising to see some more risk-off flows in the coming days, until another truce is called here.

With that in mind, the AUD/USD and NZD/USD are both selling off here in early Asian trade. While the USD/JPY is seeing some strong flows towards the safe-haven JPY.

The Aussie has been soft all week since we heard from the RBA by way of the minutes. That suggested that there could well be more interest rate cuts ahead.

While the Kiwi has not been able to really rally in the aftermath of the non-cut by the RBNZ. We are seeing resistance overhead that has held on multiple occasions.

For the AUD/USD, we can see that price is now under 0.6800. I think that we could be looking at a short position on a break of the 0.6770 level, which was a swing low of sorts.

Sometimes we see these risk-off days gather momentum as the day progresses, so that would be the thing to keep in mind today.