- AUD/USD prints mild gains amid risk reset.
- A light economic calendar, absence of US response to the Hong Kong issue triggers the pullback.
- US holiday keeps qualitative catalysts on the driver’s seat.
AUD/USD remains modestly positive around 0.6540/45, up 0.11% on a day, amid the Asian session on Monday. Although the US-China tension keeps Aussie buyers worried, the latest silence on the part of US President Donald Trump over the Hong Kong issue seems to contribute towards the pair’s pullback moves. Additionally, a lack of major data, as well as the US holidays, gives traders a chance to recover the previous two-day losses.
Following the US policymakers’ signals to make sure that Hong Kong remains free from Chinese pressure, Beijing announced readiness to enact e legislation that would tighten the dragon nation’s grip over Hong Kong.
While the majority of the Western world diplomats, joined by US Secretary of State Mike Pompeo, criticized the Asian major’s efforts to harm the neighbour’s democracy, US President Trump is surprisingly silent over the issue off-late. It’s worth mentioning that Hong Kong’s pro-democracy group staged the first protest of 2020 during the weekend.
On the other hand, Global Times keeps flashing worrisome headlines to challenge the world’s largest economy and risks fallout from the trade deal.
Additionally, Aussie PM Scott Morrison and the company reiterated its support for Hong Kong’s autonomy while also talking down that they have triggered a political row with China as saying that.
That said, the market’s risk-tone remains on the recovery mode as the S&P 500 Futures and Japan’s NIKKEI register gains by the press time.
Looking forward, traders may keep eyes on the US-China tussle for fresh impulse amid the US holidays and a light calendar moving forward.
Technical analysis
Despite the recent recoveries, buyers will not risk entry unless the pair closes beyond 0.6625 comprising 200-day EMA, which in turn highlights a 100-day EMA level of 0.6485 as short-term key support.
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