“¢ The USD fails to capitalize on the overnight up-move and helps gain some positive traction.
“¢ RBA rate cut bets/unresolved US-China trade disputed to keep a lid on attempted recovery.
The AUD/USD pair staged a modest rebound from three-week lows, albeit seemed struggling to extend the momentum further beyond the 0.7100 handle.
The pair managed to attract some buying interest at lower levels and recovered a part of previous session’s sharp fall of over 85-pips, led by news that one of the Australias 4 big national banks – NAB, raised the home loan rates.
The move was interpreted to further hurt the domestic housing market and might force the RBA to lower interest rates, which was eventually seen exerting some heavy downward pressure on the Australian Dollar.
However, some renewed weakness around the US Dollar, which failed to capitalize on the overnight goodish up-move, turned out to be one of the key factors that provided a minor lift during the Asian session on Friday.
The uptick seemed lacking any strong bullish conviction amid yet unresolved US-China trade disputes, especially after Thursday’s less optimistic US-China trade-related comments by the US Secretary of Commerce Wilbur Ross.
In an interview on CNBC, Ross said that we are miles and miles away from resolving China trade issues as structural reforms are the hard thing with China and kept a lid on any meaningful up-move for the China-proxy Aussie.
It would now be interesting to see if the pair is able to build on the attempted recovery amid absent relevant market moving economic releases on the last trading day of the week.
Technical levels to watch
Sustained move beyond the 0.7100 handle is likely to confront immediate resistance near the 0.7120 region and is followed by the 0.7155-60 supply zone. On the flip side, the 0.7075 area now seems to act as immediate support, below which the pair is likely to accelerate the fall towards the 0.7025 region en-route the key 0.70 psychological mark.
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