AUD/USD: Under pressure around 0.6800 as trade/Hong Kong news favor risk-off

• AUD/USD fails to recover losses made the previous day amid trade/political pessimism.
• Headlines from the US signal reducing odds of a phase one deal with China.
• FOMC minutes turned out to be a non-event, eyes on second-tier US data amid no major statistics from Australia.

With the US House of Representatives passing the Hong Kong Bill, coupled with the President Trump’s trade-negative statements, AUD/USD remains on the slippery grounds while trading near 0.6800 during early Thursday’s Asian session.

The United States (US) House of Representatives recently passed a bill requiring regular reviews of Hong Kong’s special financial status and bar exports of many crowd control munitions to the Hong Kong police. The Hong Kong Human Rights And Democracy Act is now on President Donald Trump’s table for a sign, which he is more likely to do, before turning into the law.

On the other hand, the Republican leader keeps spreading market pessimism that there could be any trading deal with China as his latest comments mention, “Do not think China is stepping up to the level I want in trade talks.” The same joins the CNBC’s earlier story that relies on four sources close to the talks while increasing the odds of no tariff rollback from the US, which is the main roadblock for the phase one deal at the moment.

With this, the market’s risk-tone stays heavier with the S&P 500 Futures slipping below 3,110. The US 10-Year Treasury yields also closed on the negative side, around 1.747%, by the end of Wednesday’s trading session.

Previously, minutes of the Federal Open Market Committee’s (FOMC) latest monetary policy meeting offered no surprise as the Fed policymakers keep lauding the present measures while staying ready for any action if needed.

Given the lack of any major data on the economic calendar during the Asian session, markets are likely to emphasize trade/political headlines for fresh impulse.

Technical Analysis

Failure to cross 50-day Exponential Moving Average (EMA) level, near 0.6830 now, keep directing the Aussie pair towards the monthly bottom surrounding 0.6770. Though, an ascending trend line from October 09, at 0.6790, can offer an intermediate stop during the declines.