- Positive trade-related developments continue to underpin the Aussie.
- The USD held on the defensive and remained supportive of the uptick.
- Investors now eye US retail sales data for short-term trading impetus.
The AUD/USD pair edged higher through the early European session on Friday, albeit remained well within a broader trading range held over the past four trading sessions.
After the overnight intraday rejection slide from the 0.6900 round figure mark, the pair managed to regain some positive traction on the last trading day of the week and was being supported by encouraging signs that the United States and China were narrowing their differences over trade.
US-China trade optimism/weaker USD remained supportive
Trade concerns eased further after China was said to narrow the scope for upcoming trade negotiations in hopes to resolve some key issues and break the deadlock. Adding to this, reports suggested that the Trump administration might offer a limited trade agreement to China that would delay and even roll back some US tariffs.
The incoming positive trade-related headlines continued fueling the global risk sentiment and underpinned demand for the perceived riskier/China-proxy Australian Dollar, which coupled with a weaker tone surrounding the US Dollar remained supportive of the bid tone surrounding the major.
Despite the uptick, the pair seemed lacking any strong bullish conviction as investors now seemed to await a fresh catalyst, possibly from the upcoming FOMC meeting on September 17-18, before positioning for any further near-term appreciating move.
In the meantime, Friday’s release of the US monthly retail sales data might influence the USD price dynamics and produce some meaningful trading opportunities on the last trading day of the week.
Technical levels to watch
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