AUD/USD holds weaker near 1-week lows, around mid-0.7100s

   “¢   Fading US-China trade optimism continues to weigh on Aussie.
   “¢   A modest pickup in the USD demand adds to the selling bias.
   “¢   Dovish Fed expectations likely to help limit further downside.

The AUD/USD pair remained under some selling pressure through the Asian session on Thursday and is currently placed at one-week lows, around the 0.7155-60 region.

The Aussie remained on the back foot and was pressured by the US Trade Representative Robert Lighthizer’s remarks, saying that he did not see any progress made on structural issues during the US-China trade talks last week.

This coupled with a modest pickup in the US Dollar demand further dented the already weaker sentiment surrounding the China-proxy Aussie and collaborated to the pair’s weaker tone for the third session in the previous four.

The USD bulls, however, seemed lacking strong conviction amid dovish Fed expectations and might now turn out to be the only factor that might restrict any meaningful move to the downside.  

Recent comments by influential FOMC members indicated that they are in no hurry to raise interest rates further against the backdrop of slowing global growth and should help limit deeper losses, at least for the time being.

Moving ahead, today’s US economic docket, featuring the second-tier releases of initial weekly jobless claims and Philly Fed Manufacturing Index, could influence the USD price dynamics and produce some short-term trading opportunities.

Technical levels to watch