AUD/USD holds the lower ground sub-0.6850 amid trade jitters

• Aussie – volatile but within range near two-week lows.
• Trump dashes hopes on trade deal clarity, risk hit.
• Markets await fresh trade news, US data and Powell’s testimony.

The AUD/USD pair witnessed a volatile Wednesday’s Asian session so far, mainly driven by the US-China trade anxiety and Reserve Bank of New Zealand’s (RBNZ) rates on-hold surprise decision.

US-China trade updates remain the key driver

The upside attempts in the Chinese proxy, the Aussie, continue to get sold-off into growing worries that the US-China trade talks are stalling after the US President Trump failed to deliver any new details on the likely trade deal. The 16-month long US-China trade war has fueled global economic slowdown fears that continue to hurt the broader market sentiment as well as the demand for the higher-yielding/ risk currencies such as the AUD while boosting the safe-haven flows in the US dollar across the board.

However, the bulls manage to defend the two-week lows of 0.6931 for the time being, helped by the 1+% surge in its OZ counterpart, the Kiwi, after the RBNZ unexpectedly refrained from delivering a rate cut that was widely priced in by the markets. Meanwhile, RBNZ Governor Orr’s comments also kept the buoyant tone intact around the NZD.

Despite the two-way price movements seen over the last hours, the risks remain  skewed to the downside in the spot, as the renewed trade jitters will continue to have a negative influence ahead of the US CPI data and Fed Chair Powell’s testimony on the economic outlook before the congressional Joint Economic Committee later on Wednesday.

Also, in focus remains the key Australian jobs report due on Thursday at 0030 GMT, which will offer fresh hints on the RBA’s likely monetary policy path.

AUD/USD Technical levels to consider