“¢ Escalating US-China trade tensions keep a lid on any meaningful USD up-move.
“¢ Retracing US bond yields add to the USD weakness and provides an additional boost.
“¢ Fedspeak eyed for some trading impetus ahead of RBA minutes on Tuesday.
The AUD/USD pair has managed to rebound around 25-pips from Asian session lows and is currently placed at fresh session tops, around mid-0.7400s.
A combination of factors kept a lid on any strong follow-through US Dollar upsurge and was seen as one of the key factors behind the pair’s modest rebound from closer to 11-month lows, set on May 9th.
The US President Donald Trump approved a 25% tariff on about $50 billion worth of Chinese imports and revived fears of a full-blown trade war between the world’s two largest economies. This coupled with retracing US Treasury bond yields weighed on the greenback and collaborated to the pair’s uptick at the start of a new trading week.
However, a weaker tone around commodity space, especially copper, did little to provide any additional boost to the commodity-linked Australian Dollar and could now act as the only factor hindering any additional up-move, at least for the time being.
In absence of any major market moving economic releases from the US, speeches by influential FOMC members – Atlanta Fed President Raphael Bostic and San Francisco Fed President John Williams might help traders grab some short-term opportunities ahead of the RBA monetary policy meeting minutes during the Asian session on Tuesday.
Technical levels to watch
Immediate resistance is pegged near the 0.7470 area, above which the pair is likely to aim towards reclaiming the key 0.7500 psychological mark before eventually darting towards its next hurdle near the 0.7540-45 supply zone.
On the flip side, the 0.7425-20 region might continue to protect the immediate downside, which if broken now seems to pave the way for an extension of the downfall, even below the 0.7400 handle, towards the 0.7370 support area.
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