• Rallying iron ore prices helped regain some positive traction on Tuesday.
• A modest pickup in the USD demand/US-China trade tensions cap gains.
• Traders now eye US consumer confidence data for short-term impetus.
The AUD/USD pair struggled to capitalize on its Asian session positive move, albeit has managed to hold its neck comfortably above the 0.6900 handle.
After yesterday’s modest pullback from over one-week tops, the pair managed to regain some positive traction on Tuesday and was being supported by upbeat Australian consumer confidence data. This coupled with a rally in the iron-ore prices – hitting record highs in China, provided an additional to the commodity-linked Australian Dollar.
The uptick, however, lacked any strong bullish conviction amid growing market expectations of 25 bps interest rate cut by the RBA in June and another cut during the second half of this year. Adding to this, a follow-through US Dollar uptick further collaborated towards capping any meaningful recovery, at least for the time being.
Meanwhile, concerns over a further escalation in the US-China trade tensions – especially after the US President Donald Trump’s comments that he was not ready to make a deal with China, might also turn out to be one of the key factors keeping a lid on any attempted recovery for the China-proxy Aussie.
Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term and positioning for any further appreciating move.
Moving ahead, today’s US economic docket – highlighting the release of Conference Board’s Consumer Confidence Index, will now be looked upon for some short-term trading impetus later during the early North-American session.
Technical levels to watch