Taiwan's defence ministry said in the past 24 hours, twelve Chinese air force planes entered Taiwan's air defence zone.

US House Speaker Nancy Pelosi visited Taiwan and met Taiwanese President Tsai Ing-wen in August in defiance of Chinese warnings for the trip not to take place.

China launched war games near the island it claims as its "sacred" territory shortly after Pelosi left. 

The government of Taiwan, formally the Republic of China, maintains that as the island has never been ruled by the People's Republic of China its claims of sovereignty are void.

There has been no reaction to the news in markets so far with the Aussie a likely proxy for escalations and the US Dollar regarded as a safe haven, the bias would be to the downside in AUD/USD.

AUD/USD update

The following illustrates a bearish bias looking at the daily timeframe.

The M-formation is a topping pattern and trendline support is eyed on the way to 0.6850. A break of this area opens the risk of a move to test below 0.6800