AUD/USD looks to regain 0.7200 heading into a Big week

• Unfazed by fresh US-China trade-related headlines, as broad USD softness underpins.
• Holiday-thinned markets to exaggerate the moves, focus shifts to Australian CPI, US-China trade talks and FOMC.

The AUD/USD pair is seen moving back and forth in a narrow range within the upper bound of the 0.71 handle amid holiday-thinned markets while markets turn cautious heading into the crucial US-China trade talks due later in the week ahead.

The bulls are looking to reclaim the 0.72 handle, despite fresh concerns over the US-China trade issue following reports that the World Trade Organisation (WTO) is expected to investigate Trump’s tariffs on the Chinese goods. Recall that the US-China trade talks are set to resume later this week.

The main driver behind the Aussie’s upside is broad-based US dollar weakness, as the greenback remains under pressure, in the wake of the recent Wall Street Journal (WSJ) report that cited the Fed  will pause its policy normalization.  The USD index keeps its range near weekly lows of 95.74, modestly flat so far.

Calendar-wise, Monday holds little of relevance for the pair and hence, the attention turns towards the key Australian Q4 2018 CPI report and the FOMC decision due on Wednesday for the next direction on the prices.

AUD/USD Technical Levels