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  • AUD/USD remains confined in a range near one-week tops.
  • Concerns over the US-China relations weighed on the aussie.
  • A modest USD uptick also kept a lid on any meaningful upside.

The AUD/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the Asian session on Tuesday.

The pair failed to capitalize on its recent positive momentum to near two-week tops and was seen oscillating in a narrow trading band amid a subdued trading action on Tuesday. As the market digested the latest optimism over an interim US-China trade agreement, traders preferred to wait for a fresh catalyst before positioning for the next leg of a directional move.

It is worth recalling that the US President Donald Trump said over the weekend that the US and China would sign their so-called phase one trade pact very shortly. Adding to this, China announced on Monday that it would lower import tariffs from January 1 on around 850 US products – ranging from frozen pork to some type of semiconductors.

However, China has stepped up criticism that the US is interfering in Hong Kong, Taiwan and other matters that it considers internal. Contradictory developments around the US-China relations seemed to be the only factor holding investors from placing any fresh bullish bets around the China-proxy Australian dollar.

This coupled with a modest US dollar uptick, though lacked any strong follow-through, further collaborated towards capping the upside for the major. Hence, it will be prudent to wait for a sustained move beyond December monthly swing high resistance near the 0.6940 region in order to confirm the near-term bullish bias.

Technical levels to watch