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  • Hopes of progress in the US-China trade talks underpinned the China-proxy Aussie.
  • The USD gains further traction amid recovering US bond yields and might cap gains.
  • Investors now look forward to Friday’s US macroeconomic data for a fresh impetus.

The AUD/USD pair built on its steady intraday recovery move and is currently placed near the top end of its daily trading range, around the 0.6760-65 region.
 
Despite the previous session’s late slide back closer to three-week lows, the pair continued finding some support near the 0.6745-40 region and managed to regain some positive traction on the last trading day of the week.
 
It is worth mentioning that a turnaround in the risk sentiment on Thursday underpinned the US Dollar’s relative safe-haven status against its Australian counterpart and led to the pair’s intraday slide of around 35 pips.
 
Against the backdrop of an impeachment inquiry against the US President, the House Intelligence Committee released the letter from the ‘whistleblower’ concerning Trump’s conversations with Ukraine and soured market sentiment.

Trade optimism extended some support

However, the recent encouraging trade developments, which revived hopes for a resolution of the prolonged US-China trade disputes, extended some support to the China-proxy Aussie and helped limit any further downside.
 
Meanwhile, the intraday uptick remained unaffected by a follow-through US Dollar buying interest, supported by a modest pickup in the US treasury bond yields, albeit might turn out to be the only factor capping further gains.
 
Hence, it will be prudent to wait for a sustained strength back above the 0.6800 handle before positioning for any further near-term appreciating move as market participants now look forward to the US macro data for a fresh impetus.
 
Friday’s US economic docket highlights the release of the closely watched US Durable Goods orders data and Core PCE price index – the Fed’s favourite inflation measure – due later during the early North-American session.
 
This along with the release August Personal Income, Personal Spending and revised UoM Consumer Sentiment Index might further contribute towards producing some meaningful trading opportunities on the last day of the week.

Technical levels to watch