- AUD/USD turns higher for the fourth consecutive session on Monday.
- US-China trade optimism continues to underpin the China-proxy aussie.
- A subdued USD demand remained supportive ahead of the US macro data.
The AUD/USD pair held steady above the 0.6900 handle, with bulls now looking to extend the momentum further beyond the very important 200-day SMA.
After a modest bearish gap opening on the first day of a new trading week, the pair managed to regain some positive traction and climbed to over one-week tops during the Asian session. A combination of factors helped the pair to build on the last week’s positive move and turn higher for the fourth consecutive session on Monday.
Supported by a combination of factors
The China-proxy Australian dollar remained well supported by the latest optimism over an interim US-China trade agreement, especially after China said on Monday that it would lower import tariffs from January 1 on around 850 US products – ranging from frozen pork to some type of semiconductors.
This comes on the back of the US President Donald Trump’s announcement on Saturday that the US and China would sign their so-called phase one trade pact very shortly. The latest trade developments extended some support to the global risk sentiment and further underpinned perceived riskier currencies – like the aussie.
The uptick was further supported by a subdued US dollar price action. As investors looked past Friday’s mostly upbeat US economic data, a modest pullback in the US Treasury bond yields kept the USD bulls on the defensive and remained supportive of the pair’s goodish intraday bounce of around 20-25 pips.
It will now be interesting to see if the pair is able to capitalize on the positive move or continues with its struggle to find acceptance above 200-DMA. Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders data in order to grab some short-term opportunities.
Technical levels to watch
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