“¢ Bulls seemed uninspired by today’s better-than-expected Aussie trade surplus data.
“¢ US-China trade tensions/a modest USD rebound keeps exerting downward pressure.
The AUD/USD pair struggled to build on an early uptick to session high level of 0.7211 and has now moved within striking distance of 27-month lows, set in the previous session.
After yesterday’s good two-way moves, the pair met with some fresh supply on Thursday and seemed rather unaffected by better-than-expected Aussie trade balance data. According to a report released by the Australian Bureau of Statistics, July trade surplus stood at A$1.55 billion for July as against A$1.40 billion anticipated.
Despite a beat on the estimates, the reading was still down from an upwardly revised A$1.94 billion surplus and thus, failed to lend any meaningful support. Adding to this, looming deadline for new US tariffs on $200 billion worth of Chinese goods, which ends today, further weighed on the China-proxy Australian Dollar.
Further collaborating to the pair offered tone was a modest US Dollar uptick, which continues to benefit from the global flight to safety amid the recent pressure on emerging market currencies. Meanwhile, a mildly positive tone around copper prices did little to lend any support to the commodity-linked Australian Dollar, albeit might help limit further downside, at least for the time being.
Moving ahead, today’s US economic docket, featuring the release of ADP report and ISM non-manufacturing PMI, will now be looked upon for some fresh impetus later during the early North-American session.
Technical levels to watch
The 0.7150-45 region might continue to protect the immediate downside, which if broken might turn the pair vulnerable to extend the downfall towards testing the 0.7100 handle. On the flip side, the 0.7210-20 region now seems to have emerged as an immediate strong hurdle, above which the recovery move could get extended towards the 0.7240-50 supply zone.
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