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  • AUD/USD keeps sideways moves between 0.7145/55 following its late-Thursday bounce off 0.7135.
  • RBA’s Lowe struck cites economic outlook but rules out negative rates.
  • Mixed sentiment concerning Sino-American trade future, US stimulus battle receding coronavirus figures at home.
  • China Industrial Production, Retail Sales will be the key for now, risk catalyst keep the driver’s seat.

AUD/USD pays a little heed to RBA Governor Philip Lowe’s downbeat economic outlook while taking rounds to 0.7150/55 during the pre-Tokyo open trading on Friday. RBA’s Lowe conveys a high degree of uncertainty while justifying the need for the central bank’s latest action. However, traders seem to wait for the question-answer session for more clarity.

Read: RBA’s Lowe’s prepared statement and key notes, eyes on AUD downside

Other than the wait for more details from RBA’s Lowe, market players also seem to get confused between the recent updates from US President Trump and coronavirus (COVID-19) updates from Australia.

Talking about the virus, the epicenter Victoria seems to gradually overcome the pandemic as the latest readings slip below 400 mark, to 372, after multiple days beyond the same level. On the other hand, receding virus cases in the US, an average 50,000 daily, gains doubts amid a lesser push on the testing side.

Elsewhere, the Sino-American tension continues as US President Donald Trump recently said to have an unfriendly attitude towards China despite the dragon nation’s increased agricultural buying. However, the White House Adviser Larry Kudlow and Caixin’s report relying on a private survey of the US businesses suggest that the world’s two largest economies will end-up settling their terms in the long-run.

Amid these plays, S&P 500 Futures gains 0.23% to pierce 3,375 after Wall Street benchmark’s flashed mixed performance the previous day.

Having witnessed the initial reaction to the RBA Governor’s testimony, markets will keep eyes on the three-hour long question-answer session for fresh impulse. Meanwhile, China’s July month data dump will join risk factors including the pandemic headlines, US aid package news and the US-China updates that will entertain the market players.

Although RBA’s Lowe is less likely to defy the underlying economic worries, due to the virus resurgence, any surprise positive comments may offer intermediate pullback in the pair. The moves could gain impulse from likely upbeat China data wherein the headline Industrial Production is likely to rise from 4.8% to 5.1% while Retail Sales could also recover from -1.8% previous drop to +0.1%.

Technical analysis

21-day EMA near 0.7120 restricts the pair’s immediate downside ahead of 0.7100 round-figures and an ascending trend line from June 15, at 0.7080 now. Meanwhile, buyers are less likely to take fresh entries unless witnessing a clear break above 0.7200, which in turn could aim to refresh the monthly top surrounding 0.7145.