- The prevalent USD selling bias helped ease the bearish pressure, gain some traction.
- Short-covering fueled the recovery move ahead of lower-level US-China trade talks.
The AUD/USD pair built on its goodish intraday bounce and is currently placed at the top end of its daily trading range, just above the 0.6800 handle.
The pair extended its recent rejection slide from the 0.6900 neighbourhood and refreshed two-week points amid rising odds that the Reserve bank of Australia might cut interest rates again in October, albeit once again managed to find some support near the 0.6780-75 congestion zone.
Weaker USD helped bounce off lows
The prevailing selling bias around the US Dollar – weighed down by weaker US Treasury bond yields and despite Wednesday’s hawkish rate cut by the Fed – helped ease the bearish pressure and turned out to be one of the key factors behind the pair’s intraday rebound of around 30 pips.
Friday’s recovery could further be attributed some short-covering move as investors look forward to the lower-level trade talks between the US and China in Washington, which will lay the groundwork for high-level discussions in early-October and eventually influence the China-proxy Australian Dollar.
In absence of any major market-moving economic releases from the US, traders on Friday are likely to take some cues from a scheduled speech by Boston Fed President Eric Rosengren in order to grab some short-term opportunities on the last day of the week.
Technical levels to watch