“¢ Renewed US-China trade tensions weigh on Aussie and seemed to cap the up-move.
“¢ The USD fails to capitalize on the overnight bounce and helped limit the downside.
After yesterday’s sharp pull-back from three-week tops, the AUD/USD pair now seems to have stabilized and was seen oscillating in a narrow trading band around the 0.7100 handle.
The pair stalled its recent positive momentum and witnessed an intraday retracement slide of over 70-pips on Thursday. With investors looking past an ultra-dovish FOMC, a goodish US Dollar rebound from the lowest level since early February turned out to be one of the key factors prompting some fresh selling at higher levels.
This coupled with resurfacing US-China trade tensions, which largely offset Thursday’s unexpected dip in the Aussie unemployment rate, further drove flows away from the China-proxy Australian Dollar and collaborated the pair’s overnight retracement slide of over 70-pips.
Meanwhile, the greenback failed to capitalize on the previous session’s goodish up-move and helped limit further downside, albeit a modest drop in the Aussie flash manufacturing PMI, coming at 52.0 for March vs. 52.9 previous, failed to provide any meaningful impetus and led to a subdued/range-bound price action on Friday.
In absence of any major market moving economic releases, the USD price dynamics and any fresh trade-related headlines might act as key determinants of the pair’s momentum on the last trading day of the week.
Technical levels to watch
A follow-through retracement below the 0.7085 horizontal zone is likely to accelerate the slide towards weekly lows, around the 0.7055 region, below which the pair might turn vulnerable to aim back towards challenging the key 0.70 psychological mark. On the flip side, the 0.7125-30 region now seems to act as an immediate resistance, which if cleared might lift the pair back towards the 0.7165-70 region en-route the 0.7200 round figure mark.