“¢ The USD remained depressed amid firming Fed rate cut expectations.
“¢ Fears of a further escalation in the US-China trade tensions capping gains.
“¢ The market focus remains on Friday’s key release of the US jobs report.
The AUD/USD pair seesawed between tepid gains/minor losses and oscillated in 15-20 pips narrow trading band through the early European session on Friday.
The pair failed to capitalize on its recent bounce from multi-month lows and remained capped below the key 0.70 psychological mark, largely unaffected by the recent US Dollar weakness. The greenback has been hit hard on the back of firming market expectations for a Fed rate cut before the end of this year, reinforced by comments from various FOMC members, including the Chair Jerome Powell.
Meanwhile, fears of a further escalation in the US-China trade tensions seemed to be one of the key factors keeping a lid on any meaningful up-move for the China-proxy Australian Dollar. The US President Donald Trump threatened that tariffs on China could be raised by another $300 billion if necessary and China responded by saying that it will take retaliatory measures if the US further escalates the trade war.
Investors also seemed reluctant to place any aggressive bets and preferred to wait on the sidelines ahead of Friday’s important release of the closely watched US monthly jobs report – popularly known as NFP, which might play a key role in influencing the near-term USD price dynamics and eventually help determine the pair’s near-term trajectory.
Technical levels to watch
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