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  • AUD/USD witnessed an inverse head-and-shoulder breakout earlier this week.
  • Still, big gains remain elusive, possibly due to renewed geopolitical tensions.

The AUD/USD rose above the inverse head-and-shoulders neckline on Tuesday, raising prospects of a convincing move above 0.76, however, trade tensions and geopolitical concerns seem to have played a spoilsport.

As of writing, the pair is trading in a sideways manner around 0.7570. The US President Trump canceled North Korea summit yesterday, pushing both nations back into crisis mode. Thus, risk sentiment soured – Dow Jones Industrial Average (DJIA) fell 76 points or 0.30 percent.

The risk-off action seems to have capped upside in the AUD/USD. It is worth noting that s&P 500 futures are reporting a 0.25 percent gain in Asia, signaling a risk-reset but is having no positive impact on the Aussie.

It could be an indication the AUD market is concerned about other issues – signs of a bearish reversal in oil and energy stocks (bad news for other commodities).

That said, the pair may pick up a bid if the US durable goods number, due later today, prints below estimates.

AUD/USD Technical Levels

Key resistance: 0.7595 (4-hour 200MA), 0.7624 (50-day MA), 0.7660 (61.8% Fib R of 0.7813-0.7412).

Key support: 0.7539 (10-day MA), 0.7488 (May 18 low), 0.7447 (May 16 low).

4-hour chart