AUD/USD struggles to recover its losses, trades little above 0.7150

• AUD/USD is falling for second straight day on Thursday.
• US Dollar Index consolidates Wednesday’s gains around 93.00.
• AUD fails to capitalize on easing US-China tensions.

The AUD/USD pair snapped its three-day winning streak on Wednesday and lost more than 60 pips. The pair struggled to stage a rebound on Thursday and extended its slide to 0.7150 before going into a consolidation phase. As of writing, the pair was down 0.3% on the day at 0.7160.

Earlier in the day, China’s Commerce Ministry Spokesman Gao Feng announced that China and the US have agreed to hold trade talks in the coming days to assess the phase one deal. Nevertheless, China-proxy AUD failed to capitalize on these remarks.

USD gathers strength on FOMC Mİnutes

On the other hand, the US Dollar Index (DXY) rose sharply on Wednesday as the FOMC’s July meeting minutes showed that policymakers were concerned about costs associated with yield caps and targets. After retracing this week’s slide and closing at 93.00, the DXY fluctuates in a tight range on Thursday.

Commenting on the FOMC’s publication, “members were duly pessimistic expressing concerns that the coronavirus would continue to prevent a robust recovery and could possibly present a danger to the financial system,” noted FXStreet analyst Joseph Trevisani.

In the second half of the day, the USD’s market valuation is likely to remain the primary driver of the pair’s movements. During the Asian session on Friday, Commonwealth Bank’s Manufacturing and Services PMI data from Australia will be looked upon for fresh impetus.

Technical levels to watch for