- The pair regains traction despite a follow-through USD recovery on Wednesday.
- Further gains are likely to remain limited ahead of Trump-Xi meeting this week.
- Wednesday’s release of US durable goods orders eyed for some short-term impetus.
The AUD/USD pair caught some fresh bids on Wednesday and jumped to two-week tops, around the 0.6980 region in the last hour.
After yesterday’s good two-way price moves and an early tick lower to mid-0.6900s, the pair managed to regain positive traction during the Asian session on Wednesday and seemed rather unaffected by a follow-through uptick in the US Dollar.
It is worth recalling that the greenback staged a goodish bounce on Tuesday in reaction to not so dovish comments by St Louis Fed President James Bullard, dismissing a 50bps rate cut, and the Fed Chair Jerome Powell, saying that it is important not to overreact to any individual data point.
Meanwhile, the positive momentum seemed to lack any obvious fundamental catalyst and hence, runs the risk of fizzling out rather quickly as traders are more likely to refrain from placing any aggressive bets ahead of the crucial G20 meeting later this week.
The US President Donald Trump and his Chinese counterpart Xi Jinping are expected to meet on the sidelines of the summit to discuss trade-related issues, which might play an important role in determining the next leg of a directional move for the China-proxy Australian Dollar.
It would now be interesting to see if the pair is able to capitalize on the move or loses traction at higher levels as traders now look forward to Wednesday’s US economic docket – featuring the release of durable goods orders data, due later during the early North-American session for some short-term impetus.
Technical levels to watch
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