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  • US-China trade uncertainty exerted some fresh pressure on the China-proxy aussie.
  • Deteriorating global risk sentiment further collaborated to the pair’s weaker tone.
  • Bulls managed to defend the 0.6800 handle ahead of the release of FOMC minutes.

The AUD/USD pair edged lower through the Asian session on Wednesday, albeit has still managed to hold its neck above the 0.6800 round-figure mark.
The pair failed to capitalize on the previous session’s goodish intraday rally of around 50 pips, rather met with some fresh supply during the Asian session on Wednesday amid the lack of clarity on the US-China trade talks.

Focus on trade developments, FOMC minutes

In the latest trade-related development, the US President Donald Trump on Tuesday noted that China was “moving along,” but any deal would need to be one he liked and warned of more tariffs if negotiations failed.
Adding to this, the US Senate unanimously passed a bill aimed at protecting human rights in Hong Kong, which might further fuel tension between the world’s two largest economies and weighed on the China-proxy aussie.
The uncertainty weighed on investors’ sentiment and led to a fresh wave of risk-aversion trade, which further benefitted the US dollar’s perceived safe-haven status against its Australian counterpart and collaborated to the weaker tone.
Meanwhile, the downside is likely to remain limited as traders might refrain from placing any aggressive bets and prefer to wait on the sidelines ahead of the release of the latest FOMC monetary policy meeting minutes.

Technical levels to watch