AUDUSD reversal from 0.6680 finds support at 0.6565

• AUD/USD pullback from 0.6680 finds buyers at 0.6565.
• Australian dollar rally falters as Trump stirs US-China tensions.
• Aussie’s rally might be nearing a tipping point – Credit Suisse.

Australian dollar’s reversal from 2, 1/2-month highs at 0.6680 has been contained at 0.6565 on Wednesday’s US trading session and the pair is trimming losses, attempting to regain the 0.6600 area.

Aussie’s rally losses steam on US-China tensions

AUD/USD’s uptrend from 0.6500 lows last week stalled on Tuesday at the mid-range of 0.6600.  The pair, however, has pulled back on Wednesday as market sentiment faltered after US President Trump threatened with a strong response to China’s new security law for Hong Kong.

The Aussie appreciated nearly 20% over the last two months, returning to levels pre-COVID-19, buoyed by investor’s hopes that Australia will lead the major economies on the post-pandemic economic recovery.

AUD/USD: upside capped at  0.6659/0.6706 – Credit Suisse

The  FX analysts’ team at Credit Suisse see the current uptrend highly likely to be capped below 0.6706: “We look for the 0.6659/6706 area to cap and see weakness taking over again in due course. With this in mind, we see support initially at 0.6610, then 0.6538, ahead of the late May lows and 21-day exponential average at 0.6507/06, where we would expect to see fresh buying at first.”