- AUD/USD trades little weak around 0.7155 during Asian trading on Tuesday.
- The pair failed to hold previous gains from the positives of US-China trade deal as risk-off returns to the market.
- The Fed Chair’s semi-annual testimony will be a crucial event to watch.
The AUD/USD pair trades near the intra-day lows of 0.7155 on early Tuesday. The pair trimmed majority of its previous-day gains as risk-off sentiment returned to markets. Investors now await the beginning of the Fed Chair’s two-day testimony together with further clarification on the US-China trade deal in order to determine near-term trade direction.
AUD/USD benefited the previous day after the US President Donald Trump praised progressive trade talks and showed readiness to delay tariff-hike deadline from March 01 on China. He also signaled a trade meeting to finalize the pact with his Chinese counterpart Xi Jinping soon in Florida.
However, the pair fall short of extending the gains overnight as sellers arrive with fresh doubts over how the Trump-Xi meet could overcome the global financial market’s nightmare. Additionally, comments from ex-Fed Chair Janet Yellen and the present Vice Fed Chair, Richard Clarida offered extra weakness to the pair.
Yellen mentioned that Trump doesn’t understand the Fed and the economy is doing well during her interview lines published by Bloomberg. The same statements mentioning the good shape of the economy was also confirmed by Clarida while speaking at the event in Texas. He went on to support earlier bias towards Fed’s required patience for the monetary policy.
While uncertainty surrounding Trump-Xi meet triggered risk-off, US Dollar regained on positive comments from the influential financial market personalities.
Looking forward, a start of two-day semi-annual testimony by the Federal Reserve Chair Jerome Powell will be crucial for the markets. Powell will appear before the Senate Banking Committee on the first day at 15:00 GMT.
AUD/USD Technical Analysis
The 50-day simple moving average (SMA) level of 0.7130 seems immediate important support for the pair ahead of flashing 0.7080 on the sellers’ radar.
Meanwhile, 0.7190 and 0.7235 could limit the pair’s immediate advances whereas 200-day SMA level of 0.7270 luring buyers afterward.
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