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  • The Aussie buyers were taken back amid the broad USD strength and fresh trade tension between the US and China.
  • Australia’s NAB Business Confidence and Business Conditions waited immediately while trade headlines could keep dominating market momentum.

With the fresh doubts over the US-China trade deal weighing on the market sentiment, previously built on upbeat US data, the AUD/USD pair takes the rounds to 0.6974 during the early Asian session on Tuesday.

The Aussie pair had to respect the broad US Dollar (USD) strength on Monday as the greenback buyers considered Friday’s better than forecast Nonfarm Payrolls data as a sign of economic improvement to counter recent pessimism at the US Federal Reserve.

Limiting the quote’s downside was its risk-on allure. The Aussie pair has mostly been bought during the time of market optimism and is considered as a risk barometer. Another such risk gauge is the US 10-year treasury yield which offered 1 basis point gain to revisit 2.040% mark.

In addition to the Chinese press spreading fearsome headlines, the Reuters also released a news report mentioning that the US Commerce Depart will collect new deposits from the importers of Chinese and Mexican structural steel.

With this, risk sentiment is again weighing heavy when markets await fresh clues from Australia and the US.

June month Business Conditions and Business Confidence data from the National Australia Bank will become the first one to follow. While the Business Confidence is expected to weaken to 2 from the previous 7, the Business Conditions might improve to 3 from earlier 1.

Moving on, public appearances by the US Federal Reserve policymakers, including the Chairman Jerome Powell, will be the key to watch during rest of the day. Investors will seek clues as to how the Fed members perceive the recent change in the jobs data.

Technical Analysis

The 0.6960/55 area comprising current month lows seem immediate support for the pair, a break of which can drag the quote to May 30 low near 0.6900. Alternatively, 50-day exponential moving average (EMA) near 0.6970, followed by 0.7000 round-figure, can limit the pair’s near-term upside ahead of fueling it to latest high surrounding 0.7050.