Search ForexCrunch
  • AUD/USD seesaws around 0.6550/40 since last few hours following its recoveries from 0.6519.
  • Aussie PM offered lose hints to combat China’s punitive measures with five principle based economic plan.
  • US President Trump’s silence on Hong Kong, hopes of economic restart keep the risks mildly positive.
  • Return of full markets could offer active session despite a light calendar in Asia.

AUD/USD fails to extend the recovery moves from 0.6519 beyond 0.6550m, currently around 0.6543, during the early Asian morning on Tuesday. In doing so, traders paid less attention to the Aussie PM Scott Morrison’s economic plan to combat China’s recent anti-trade measures. That said, the absence of the US and the UK traders joined no threats to China/Hong Kong from US President Donald Trump and offered a mildly positive start to the week despite brewing US-China tussle. Also favoring the mood could be hopes of the economic restart.

Aussie PM’s stimulus plan fails to please the buyers…

While offering loose hints to the five principles based economic plan to combat China’s recent anti-trade moves, Aussie PM Morrison failed to impress the buyers. Even so, the national leader hints gradual scaling back of the coronavirus (COVID-19)-led relief, which might have caused the pair’s recent stop in recoveries.

Read: Australian PM Morrison rolls out plan to save economy as China slaps tariffs on country’s exports – Sputnik

It should be noted that rumors are crossing the grapevine that the Aussie PM will reveal details of his plan during the Australian afternoon.

US-China tussle needs Trump’s push…

Although China’s push to tighten the grips in Hong Kong gained broad criticism from the Western world, US President Donald Trump’s silence recently keeps the risk aversion at bay. It should also be noted that the US leader recently crossed wires but refrained from saying anything relating to the dragon nation’s rush to gain more power in Hong Kong.

Elsewhere, China’s Global Times keep conveying harsh criticism of the Asian major’s diplomats to the US policies. Though, the headlines failed to compress the market sentiment. The reason could be traced to mild optimism surrounding the gradual reopening of economies around the globe after a brief halt due to the virus. That said, S&P 500 Futures print 0.13% loss to 2,985 after gaining over 1.0% the previous day.

Looking forward, a light economic calendar in Asia will push the traders towards searching for more clues on the US-China and/or Aussie-China tension. Additionally, any more direction on the Aussie plan to step back from the virus-led reliefs could also offer fresh impetus to the traders.

Technical analysis

Although 100-day EMA, currently near 0.6490, restricts the pair’s immediate downside, bulls are less likely to firm their grip unless witnessing a daily close beyond 200-day SMA level surrounding 0.6620/25.