“¢ A modest USD uptick prompts some fresh selling at the start of a new trading week.
“¢ Escalating US-China trade tensions/weaker commodities add to the downward pressure.
The AUD/USD pair met with some fresh supply at the start of a new trading week and eroded part of Friday’s strong gains to near one-week tops.
The pair struggled to build on last week’s goodish rebound from YTD lows and was now being weighed down by a modest pickup in the US Dollar demand, despite weaker tone surrounding the US Treasury bond yields.
Meanwhile, escalating US-China trade tensions exerted some additional downward pressure on the China-proxy Australian Dollar. In the latest trade-related developments, the US President Donald Trump, as reported by the Wall Street Journal, plans to bar many Chinese companies from investing in the US technology firms and block additional technology exports to China.
Adding to this, a slight deterioration in investors’ appetite for riskier asset benefitted the greenback’s safe-haven appeal against its Australian counterpart, which coupled with a weaker trading sentiment around commodity space further weighed on the commodity-linked Aussie and collaborated to the pair’s retracement from the 0.7445-50 immediate hurdle.
It would now be interesting to see if the pair is able to find any fresh buying interest near the 0.7400 handle or the current pull-back marks the end of last week’s modest corrective bounce amid empty US economic docket.
Valeria Bednarik, FXStreet’s own American Chief Analyst writes: “Momentum already turning flat and the RSI at 41, indicating that the latest recovery could be reverted by bears. Shorter term, and according to the 4 hours chart, however, the pair could extend its current upward corrective movement, as it is advancing above a bullish 20 SMA, while technical indicators hold well above their midlines, partially losing their upward strength amid decreasing volumes at the end of the week, and not as a sign of decreasing buying interest.”