- Sliding US bond yields undermined the USD and helped regain some traction.
- Fading optimism over the US-China trade truce might cap any strong gains.
- Investors now eye US economic data for some meaningful trading impetus.
The AUD/USD pair finally broke out of its Asian session consolidative trading range and spiked to fresh session tops, around the 0.7015 region in the last hour.
The pair built on the previous session’s post-RBA bounce from 50-day SMA support and continued gaining positive traction for the second consecutive session on Wednesday, recovering a major part of a sharp intraday pullback witnessed on the first trading day of the week.
The ongoing slide in the US Treasury bond yields, falling to fresh multi-year tops, kept the US Dollar bulls on the defensive, which was eventually seen as one of the key factors behind the pair’s latest leg of a sudden upsurge or around 25-pips over the past hour or so.
This coupled with possibilities of some intraday trading stops being triggered on a sustained move beyond the key 0.70 psychological mark, coupled with improving risk sentiment further seemed to have collaborated towards accelerating the positive momentum.
Apart from the mentioned factors, the uptick lacked any obvious fundamental catalyst and might fizzle out rather quickly amid fading optimism over any near-term US-China trade deal, which remains a key driver of the sentiment surrounding the China-proxy Australian Dollar.
Wednesday’s US economic docket – featuring the releases of ADP report on private-sector employment and ISM non-manufacturing PMI will now be looked upon for some short-term trading opportunities later during the early North-American session.
Technical levels to watch
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