AUD/USD clings to gains above 0.6750, looks to snap three-day losing streak
|- US Dollar Index drops to fresh two-week lows on Thursday.
- Renewed trade optimism boosts the demand for the AUD.
- Coming up: The Reserve Bank of Australia's (RBA) Financial Stability Review.
After closing the first three days of the week with losses, the AUD/USD pair staged a decisive rebound on Thursday and rose to a fresh six-day high of 0.6775 before going into a consolidation phase in the American trading hours. As of writing, the pair was up 0.67% on the day at 0.6768.
Antipodeans capitalize on trade optimism
Revived hopes of the United States (US) and China reaching a trade deal seems to be the primary driver of the pair's rally on Thursday. Several news outlets reported that sides could reach a partial trade deal that includes terms regarding Yuan valuation in exchange for suspending the US tariffs next week. Additionally, Chinese Vice Premier on Thursday said that they were willing to reach agreement on matters that both sides care about and to prevent friction from further escalation.
In the meantime, the only macroeconomic data release from the US showed that the core Consumer Price Index (CPI) in September remained unchanged at 2.4% as expected. Nevertheless, the upbeat market mood made it difficult for the Greenback to find demand and the US Dollar Index slumped to its lowest level in two weeks to help the pair preserve its bullish momentum. At the moment, the index is down 0.4% on the day at 98.71.
In the early trading hours of the Asian session on Friday, the Reserve Bank of Australia (RBA) will be releasing its Financial Stability Review. More importantly, participants will be paying close attention to headlines coming out of the US-China trade negotiations.
Technical levels to watch for
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