- A strong pickup in the USD demand exerted some heavy downward pressure on Wednesday.
- Renewed US-China trade optimism did little to lend any support to the China-proxy Aussie.
The AUD/USD pair failed to capitalize on its early attempted bounce and has now retreated to the lower end of its daily trading range, closer to three-week lows set in the previous session.
Following a modest uptick over the past two trading sessions, the pair met with some aggressive supply on Wednesday and extended its recent rejection slide from the 0.6900 neighbourhood amid resurgent US Dollar demand. As investors digested the launch of a formal impeachment inquiry against the US President Donald Trump, the greenback regained strong positive traction and posted its biggest daily gains in three months on Wednesday.
Trade optimism failed to impress bulls
The sharp intraday pullback failed to gain any respite from renewed optimism over a possible resolution of the prolonged US-China trade disputes. It is worth mentioning that Trump told reporters in New York that both the sides are having some very good conversations on trade and an agreement could happen sooner than anyone thinks, albeit failed to lend any support or ease the bearish pressure surrounding the China-proxy Australian Dollar.
Meanwhile, a subdued USD demand on Thursday, amid a modest pullback in the US Treasury bond yields, provided a minor lift to the pair during the Asian session on Thursday. The uptick, however, lacked any strong bullish conviction and now clearly suggests that the near-term bearish bias might still be far from being over. Hence, a follow-through weakness, back towards challenging multi-year lows, remains a distinct possibility amid absent relevant market moving economic releases from the US.
Technical levels to watch
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