AUD/USD retreats from 0.6680 as the markets await Trump’s conference on China

• AUD/USD fails again at 0.6680 resistance area and retreats to 0.6620.
• Australian dollar loses ground with the market awaiting Trump’s conference on China.
• FX analysts at Credit Suisse see the Aussie capped below 0.6706.

The Australian dollar has failed again to break the resistance level at 0.6680 and the pair has retreated to levels near 0.6600 as risk appetite plunged ahead of US President Trump’s conference on China.

Aussie retreats on concerns about US-China tensions

The risk-sensitive AUD/USD has retreated from 2, ½ highs earlier on Friday, as market sentiment deteriorated during the US trading session. Market optimism triggered by the re-opening of the main economies has faded today, with the investors holding their breath ahead of Trumps conference.

President Trump has been threatening this week with a strong response to China’s new security law to increase control over Hong Kong. This verbal escalation has boosted investors fear that the tensions between the world two largest economies might affect international trade, hampering the post-coronavirus recovery.

AUD/USD expected to remain capped below 0.6659/0.6706 – Credit Suisse

The  FX analysts’ team at Credit Suisse see the current uptrend highly likely to be capped below 0.6706: “We look for the 0.6659/6706 area to cap and see weakness taking over again in due course. With this in mind, we see support initially at 0.6610, then 0.6538, ahead of the late May lows and 21-day exponential average at 0.6507/06, where we would expect to see fresh buying at first.” 

AUD/USD key levels to watch