“¢ Renewed US-China trade tensions weighed heavily on the Aussie.
“¢ The downside seems limited ahead of RBA policy update on Tuesday.
The AUD/USD pair managed to fill the weekly bearish gap to fresh four-month lows, albeit seemed struggling to make its way back above the key 0.70 psychological mark.
With investors looking past Friday’s softer US wage growth data, fading optimism over a possible US-China trade deal benefitted the US Dollar’s safe-haven status and weighed heavily on the China-proxy Australian Dollar.
The US President Donald Trump, via Twitter, increased pressure on China to reach a trade deal and threatened to increase tariffs on $200 billion worth of Chinese goods, dampening investors’ appetite for riskier assets.
Apart from the latest trade-related developments, speculations that the RBA will cut interest rates undermined the Aussie and further collaborated to the pair’s bearish gap opening at the start of a new trading week.
The pair moved little following the release of Chinese Caixin Services PMI, though the downside remained limited as investors seemed reluctant to place fresh bets ahead of the highly anticipated RBA policy update on Tuesday.
There aren’t any major market-moving economic releases due on Monday and hence, trade-related headlines might continue to act as a key driver of the pair’s momentum ahead of the next big event risk.
Technical levels to watch
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