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  • Rising US bond yields helped limit the USD downtick and capped gains.
  • Bullish trades seemed reluctant amid persistent US-China trade concerns.
  • The focus shifts to Wednesday’s important release of the FOMC minutes.

The AUD/USD pair edged up during the Asian session on Wednesday, albeit continued with its struggle to capitalize on the uptick and move back above the 0.6800 round figure mark.
The pair extended its sideways consolidative price action and remained well within a broader trading range held over the past one week or so, with a combination of diverging forces failing to provide any meaningful impetus and leading to a subdued trading action on Wednesday.

Traders look to subdued USD demand/US-China trade

The US Dollar held on the defensive as investors preferred to wait on the sidelines ahead of Wednesday’s important release of the latest FOMC meeting minutes, which will be followed by the Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday.
However, a goodish pickup in the US Treasury bond yields – supported by the prevalent risk-on mood – helped limit the USD downside and turned out to be one of the key factors that kept a lid on any meaningful up-move amid persistent US-China trade concerns.
In the latest US-China trade-related development, the US President Donald Trump said that he is still not ready to make a trade deal with China and held investors from placing any aggressive bets around the China-proxy Australian Dollar.
Moving ahead, Wednesday’s key focus will be on the FOMC meeting minutes, which will be closely scrutinized for clues over the Fed’s intention to cut interest rates further in September and might play a key role in determining the pair’s near-term direction.

Technical levels to watch