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  • The final round of the US-China trade talks begins with the US Pres. Trump’s latest remarks were positive.
  • The RBA’s MPS is also in the focus.

The AUD/USD pair trades near 0.6990 at the start of Asian trading on Friday. The Aussie traders remained cautious as the US and Chinese lawmakers meet for the final round of trade talks in Washington. Markets also await the quarterly release of the monetary policy statement (MPS) from the Reserve Bank of Australia (RBA).

Aussie was no different from other commodity-linked currencies that seesawed on Thursday as on and off from the US-China trade talks drove market sentiment.

During the initial day, China’s trade data offered little help to please buyers amid tension concerning the trade talks in Washington as a delegation from the dragon nation including Vice Premier Liu He reached the US for the final round of make or break trade deal.

The moves were later pushed a bit on US data including neutral PPI, a bit higher trade deficit and not many signals from the Fed Chair Jerome Powell.

At the trade deal front, the US President Donald Trump initially said they have begun the paperwork for imports on $325 billion worth of Chinese goods but he then took a U-turn saying that he has received a “beautiful” letter from China’s President Xi Jinping and is positive going forward.

Looking forward, the US and Chinese lawmakers have just started talking the trade deal for the final verdict. The Guardian said that the goods from China leaving before Friday start are still charged at the old duty rates, which in-turn signal positive outcome.

Also, RBA’s MPS will closely observe to know the details including how the central bank can remain slightly positive on GDP and inflation forecasts despite sluggish data off-late.

On the US side, the consumer price index (CPI) for April will be the key to watch. CPI ex-food and energy (MoM) could rise to 0.2% from 0.1% while the yearly statistics may improve to 2.1% form 2.0%.

Technical Analysis

The quote’s sustained trading above 0.6960 indicates brighter chances of its rise to for 0.7055 and April highs near 0.7070 on the break of 0.7000 with 100-day and 200-day simple moving averages (SMA), at 0.7110 and 0.7170 respectively, expected to flash on the chart then after.

On the break of 0.6960 support, prices may drop to 0.6920 and January 2016 low around 0.6820.