“¢ Investors looked past the recent escalation of US-China trade spat.
“¢ Renewed USD selling pressure helped recover early lost ground.
The AUD/USD pair remained confined within 25-30 pips broader trading range and is currently placed at the top end of its daily trading range, around the 0.7275-80 region.
News that China cancelled its planned trade talks with the US weighed on the China-proxy Australian Dollar and was seen as one of the key factors behind the pair’s weekly bearish gap opening, especially after Friday’s rejection near 50-day SMA hurdle, around the 0.7300 handle.
However, a fresh wave of greenback selling pressure, despite a follow-through upsurge in the US Treasury bond yields, helped limit further downside. In fact, the key US Dollar Index dropped back closer to near three-month lows and provided a minor lift to the major.
Meanwhile, a subdued action around commodity space, especially copper, did little to influence commodity-linked currencies – like the Aussie, with a combination of diverging forces failing to provide any meaningful impetus and leading to a subdued price action through the early North-American session on Monday.
Technical levels to watch
Any subsequent up-move might continue to confront stiff resistance near the 0.7300 handle, above which a fresh bout of short-covering could further lift the pair towards testing the 0.7365-70 supply zone.
On the flip side, mid-0.7200s now seems to have emerged as an immediate support, which if broken might turn the pair vulnerable to accelerate the slide further towards retesting the 0.7200 round figure mark.
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