- China confirmed to resume trade talks with the US in October.
- Softer Aussie trade balance data does little to hinder the up-move.
- Traders look forward to the US economic data for a fresh impetus.
The AUD/USD pair maintained its bid tone through the early European session on Thursday and is currently placed comfortably above the 0.6800 handle, or one-month tops.
The pair built on this week’s solid bounce from sub-0.6700 level – closer to multi-year lows set on August 7 – and continued gaining traction for the third consecutive session on Thursday. The China-proxy Australian Dollar remained well support by positive trade-related development, wherein China confirmed that it will resume trade talks with the US in October.
Positive trade-related news overshadowed softer Aussie data
Meanwhile, the positive momentum seemed unaffected by softer Aussie trade balance data, showing that surplus narrowed to A$ 7,268 million in July from June’s surplus of A$ 8,036 million and A$ 7,400 million expected. Bulls took cues from a subdued US Dollar demand, which failed to gain any meaningful impetus despite a strong pickup in the US Treasury bond yields.
Adding to this, improving global risk sentiment provided an additional boost to perceived riskier currencies – like the Aussie – and remained supportive. With Thursday’s move, the pair finally seems to have found acceptance above the 0.6800 handle and hence, a follow-through up-move, led by some technical buying, now looks a distinct possibility.
Moving ahead, Thursday’s US economic docket – highlighting the releases of ADP report on private-sector employment and ISM non-manufacturing PMI – will now be looked upon for some short-term trading impetus later during the early North-American session. The key focus, however, will remain on Friday’s release of the closely watched US monthly jobs report (NFP).
Technical levels to watch
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