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  • AUD/USD struggled to gain any traction despite US-China trade optimism.
  • A subdued USD price action helped defend the 0.6770-65 support region.

The AUD/USD pair was seen oscillating in a narrow trading band on Tuesday and consolidated the recent slide to over one-month lows set in the previous session.

Despite rising hopes of a US-China trade deal, the China-proxy – aussie has struggled to gain any meaningful traction and remained depressed for the fourth consecutive session on Monday amid increasing odds of another rate cut by the Reserve Bank of Australia (RBA).

Bulls still seemed reluctant

Adding to the recent optimism, China announced to tighten intellectual property protection rules over the weekend, while the Global Times reported on Monday that the world’s two largest economies are very close to reaching a “phase one” trade deal.

This coupled with some follow-through US dollar buying interest exerted some additional downward pressure and collaborated to the pair’s overnight slide to the lowest level since October 17, back closer to the 0.6770-65 support area tested earlier this month.

As investors digested the incoming trade-related headlines, a subdued USD price action helped bulls to defend the mentioned horizontal support, albeit did little to provide any meaningful impetus or assist the pair to register any meaningful recovery on Tuesday.

Moving ahead, Tuesday’s US economic docket – featuring the release of the Conference Board’s Consumer Confidence Index and Richmond Manufacturing Index – will now be looked upon for some fresh trading opportunities later during the North-American session.

Technical levels to watch