- AUD/USD stabilizes around 0.6830 key support as traders seek fresh clues from economic calendar.
- Fed’s action, trade news entertained sellers the previous day.
AUD/USD remains on a back foot following a nine-day losing streak as it trades near 0.6845 amid early Thursday morning in Asia.
On Wednesday, the Aussie buyers couldn’t cheer the upbeat inflation numbers for a long time as absence of breakthrough from US-China trade talks and the US Federal Reserve’s firm attitude towards future policy actions weighed on prices.
At the end of two-day-long trade negotiations, the US and China could only say that the talks were constructive while promising to meet in September again for further discussion ahead of the deal.
The Fed met market expectations of a 0.25% rate cut but comments from the Chairman Jerome Powell that the present action is not the beginning of an easy monetary policy cycle grabbed major attention to drive the US Dollar (USD) upwards.
Moving on, the Australian economic calendar has few second-tier data like AiG Performance of Manufacturing Index, Commonwealth Bank Manufacturing PMI, HIA New Home Sales and Export/Import Price Indices ahead of diverting market watchers to China’s July month Manufacturing Purchasing Managers’ Index (PMI).
While most of the data from Australia are expected to flash downbeat signs, China’s private manufacturing gauge could improve to 49.6 from 49.4 but still remain in the contraction region by flashing a number below 50.0.
Technical Analysis
Repeated failures to slip beneath 0.6830, near the lows marked yesterday and in June, coupled with oversold conditions of 14-bar relative strength index, favor the pair’s pullback towards late-May lows surrounding 0.6860 and then to July 10 bottom close to 0.6910. Alternatively, a downside break of 0.6830 opens the gate for the pair’s drop to January low around 0.6680.
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