- Aussie buyers expect China data to provide additional positive support.
- The US-China trade tensions continue limiting the pair’s upside.
Following its failure to hold RBA-led gains, mainly due to trade worries, the AUD/USD pair is again on the bids around 0.7015 during early Wednesday.
Although trade tensions between the US and China have trimmed almost half of the Aussie rise, the pair still managed to remain positive for the third consecutive day on Tuesday after the Reserve Bank of Australia (RBA) pleased Australian Dollar (AUD) buyers with a no rate cut policy.
On the other hand, Chinese delegates have confirmed to visit Washington despite expecting little towards the deal based on the US President Donald Trump’s threats to reactivate the tariff war between the world’s two largest economies. However, media reports said that the dragon nation has recently retaliated with statements like the US shouldn’t even think of levying tariffs on their products.
It should also be noted that the Aussie is considered as a risk barometer and weakens during market uncertainty. Another such global risk sentiment indicator is the US 10-year treasury yield that tested the month’s low to 2.465% on Tuesday.
Looking forward, April month trade balance data from China will be in the immediate focus of the Aussie traders as being the release from its largest customer.
Forecasts suggest, the headline trade balance data to increase to $35.00 billion from $32.67 billion prior. Details signal that exports may grow 2.3% following a 14.2% rise whereas imports could shrink -3.6% versus -7.6% earlier contractions.
It should also be noted that there aren’t any major releases from either the US or Australia which in turn highlights the trade worries. The US and Chinese lawmakers are to meet in Washington starting from Thursday to discuss the much-awaited trade deal that has recently witnessed steep declines in chances favoring the positive outcome.
Technical Analysis
Despite the latest recovery, the quote is yet to surpass April highs near 0.7070 in order to aim for 100-day simple moving average (SMA) level of 0.7110. Should prices manage to rise past-0.7110, 200-day SMA level near 0.7170 can flash on bull’s radar.
Meanwhile, 0.6980 and 0.6960 are likely nearby supports that might lead the pair down to 0.6920 and January 2016 bottom near 0.6820.
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