“¢ Struggles to build on overnight up-move despite subdued USD price-action.
“¢ Downside remains limited amid some renewed US-China trade optimism.
“¢ Traders seemed reluctant to place aggressive bets ahead of the US holiday.
The AUD/USD pair traded with a mild negative bias on Thursday and eroded a part of previous session’s goodish up-move.
A combination of supporting factors, in particular, some renewed US Dollar selling bias amid easing global risk-aversion trade, helped the pair to stage a goodish rebound from the 0.7200 handle.
The greenback was further weighed down by rumours of Fed possibly pausing the rate hike cycle as early as in spring 2019 and disappointing US macro data – durable goods orders and initial weekly jobless claims.
The up-move was further supported by reports suggesting that White House trade adviser Peter Navarro – a famous China hawk, has been excluded from the Xi Jinping-Donald Trump dinner in Buenos Aires on December 1.
Exclusion of a key figure behind the US-China trade war indicated that both sides wanted to make progress on the dispute at the summit and provided an additional boost to the China-proxy Australian Dollar.
The pair touched an intraday high level of 0.7277, albeit struggled to extend the positive momentum and retreated back below mid-0.7200s during the Asian session on Thursday.
Despite a subdued USD price-action, led by receding fears over a global economic slowdown, bulls seemed reluctant to place any aggressive bids ahead of the Thanksgiving holiday in the US.
Hence, it would prudent to wait for a strong follow-through buying before traders start positioning for any further near-term appreciating move amid relatively thin liquidity conditions.
Technical levels to watch
Immediate support is pegged near the 0.7230-25 region and is closely followed by the 0.7200 handle, below which the pair is likely to accelerate the slide back towards the 0.7165 zone.
On the flip side, sustained move beyond the 0.7270-75 region might now assist the pair to surpass the 0.7300 handle and head towards challenging 2-1/2 month tops, around the 0.7335-40 supply zone.
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