AUD/USD eases from multi-week tops, still comfortable above mid-0.6800s

• Dismal Aussie data-led early downtick turns out to be short-lived.
• US-China trade optimism continues to underpin China-proxy Aussie.
• The USD remains supported by rising US bond yields and capped gains.

The AUD/USD pair quickly reversed an early Asian session dip and spiked to fresh six-week tops, around the 0.6885 region in the last hour, albeit quickly retreated few pips thereafter.
 
The pair initially ticked lower following the release of weaker Aussie data, showing that the Westpac Consumer Sentiment Index fell 1.7% to 98.2 in September from the previous month’s reading of 100. The downtick, however, turned out to be short-lived and the pair once again managed to find decent support near mid-0.6800s.

Trade optimism attracts some dip-buying

The China-proxy Australian Dollar got a strong boost after China’s State Administration of Foreign Exchange announced to scrap quota restrictions and allow unfettered access to the stock markets to the dollar-dominated qualified foreign institutional investor, a move seen as a way to offset the effects of recent US tariffs.
 
Meanwhile, the prevalent risk-on mood allowed the US Treasury bond yields to extend their recent strong up-move, which continued lending some support to the US Dollar and turned out to be one of the key factors that kept a lid on any strong follow-through up-move for the major, at least for the time being.
 
It will now be interesting to see if the pair is able to capitalize on the positive momentum as investors look forward to the US economic docket – featuring the releases of August Producer Price Index (PPI) and wholesale inventories – for some short-term trading opportunities later during the early North-American session.

Technical levels to watch