- Recent trade positive headlines stop further declines of the Aussie.
- Political pessimism and the greenback strength question the buyers.
Having slipped from the 12-week high, AUD/USD stabilizes around 0.7050 during early Monday morning in Asia.
Like other major currency pairs, the Aussie also had to bear the burden of the US Dollar (USD) strength on Friday as investors rolled back expectations of a 50 basis points (bps) Fed rate cut. Uncertainty surrounding the US-China trade deal and lack of positive data/events at home also added weakness into the pair off-late.
Though, latest news from Chinese media signals that the dragon nation is ready to purchase more of the US agriculture products, which becomes a positive step towards the much-awaited trade deal.
On the negative side, political tension surrounding Iran has increased after the gulf nation seized two of the UK oil tankers, releasing one afterward.
While trade positive news favors the quote’s recovery, overall USD strength and political pessimism continue to undermine the market sentiment. As a result, no major change in the global bond yields can be witnessed during the early-day.
Moving on, no major data/events are on the economic calendar to watch except the US Fed National Activity Index (June) that slipped to -0.05 previously. With this, investors can keep searching for qualitative catalysts for near term directions.
Technical Analysis
200-day exponential moving average (EMA) level of around 0.7100 continues to be a tough nut to crack for the buyers targeting April month top around 0.7210. Meanwhile, 100-day EMA level of 0.7020, 0.7000 round-figure and the current month bottom surrounding 0.6910 can keep being on sellers’ radar.
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