“¢ Subdued USD demand helped regain traction at the start of a new trading week.
“¢ Investors, however, remain cautious ahead of US-China trade-talks at G20 summit.
The AUD/USD pair built on its intraday positive momentum and refreshed session tops in the last hour, albeit quickly retreated few pips thereafter.
A combination of supporting factors helped the pair to snap two consecutive days of losing streak and regain positive traction at the start of a new trading week to recover all of its losses posted over the past two sessions.
Reviving risk-appetite, led by a goodish rebound in crude oil prices, dampened the US Dollar’s relative safe-haven status. This coupled with optimism over a possible ceasefire in the US-China trade war at the upcoming G20 summit later this week provided an additional boost to the China-proxy Australian Dollar.
Despite the up-move, the pair remained well within last week’s broader trading range as investors still seemed cautious ahead of the upcoming G20 summit, where the US President Donald Trump and his Chinese counterpart Xi Jinping are expected to meet on the sidelines.
Investors are hopeful that the talks would lead to a ceasefire in the trade war between the world’s two largest economies, though seemed reluctant to place any aggressive bullish bets as a host of geopolitical risks continued to loom over markets.
Hence, it would be prudent to wait for a strong follow-through buying, possibly a sustained move beyond the 0.7300 round figure mark, before positioning for any further near-term appreciating move for the major.
Technical levels to watch
Momentum beyond the mentioned handle has the potential to continue lifting the pair further towards 0.7335-40 supply zone en-route its next hurdle near the 0.7375-80 region. On the flip side, the 0.7230 level, followed by the 0.7200 handle now seems to protect the immediate downside, which if broken might turn the pair vulnerable to slide further towards challenging the 0.7165 support area.
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