- The AUD is flashing gains despite calls for a weaker currency by Reserve Bank of Australi’s (RBA’s) Lowe.
- US-China trade talk news, recovery in metals is helping the AUD score gains.
The AUD/USD is reporting moderate gains in Asia for the second day on hopes the US and China trade talks due later this month will conclude on a positive note.
Further, an uptick in prices of key commodities is likely helping the Aussie stay on the front foot. For instance, Comex copper is currently trading at $2.62 – up more than 2 percent from the low of $2.56 reached on August 15.
More importantly, the optimism generated by the US-China trade talk news and the recovery in commodity prices has likely kept the Aussie bid despite calls for a weaker currency by RBA’s Lowe. The central bank head said earlier today that a lower exchange rate would do good to the Australian economy and added that interest rates are to remain at record lows for a while yet.
So, the rate differential is set to widen further in a USD-positive manner in the near-term. However, as of now, markets are cheering the possibility of a thaw in US-China trade spat and the modest recovery in commodity prices.
Technically speaking, the pair seems to have found a temporary low at 0.7202 and risks rising to the 200-hour moving average (MA) hurdle of 0.7324 in a day or two.
The daily chart shows a bullish doji reversal (bear-to-bull trend change) and the hourly chart shows the pair has formed a nice base along the 100-hour MA for an eventual move higher.
Daily chart
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Spot Rate: 0.7270
Daily High: 0.7280
Daily Low: 0.7253
Resistance: 0.7287 (resistance as per the hourly chart), 0.73 (zero figure), 0.7324 (200-hour MA)
Support: 0.7256 (100-hour MA), 0.7247 (50-hour MA), 0.7202 (Aug. 15 low)
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