AUD/USD clings to modest gains, bulls await a sustained move beyond 0.7300 mark
|- AUD/USD regained positive traction on Tuesday and build on last week’s bounce from 0.7220 region.
- A strong pickup in the USD demand, rising US-China tensions might keep a lid on any strong gains.
The AUD/USD pair spiked to three-day tops in the last hour, albeit struggled to find acceptance above the 0.7300 mark and quickly retreated few pips thereafter.
The pair regained some positive traction on Tuesday and finally broke out of its overnight/Asian session consolidation trading range. Bulls took cues from upbeat Chinese trade balance figures and were now looking to build on last week's rebound from the 0.7220 region, or over one-week lows.
However, a strong pickup in the US dollar demand might keep a lid on any strong gains for the AUD/USD pair. After being hit slightly by Friday's mixed US monthly jobs report (NFP), the greenback was back in demand and was being supported by some heavy selling around the European currencies.
This coupled with fresh concerns over rising US-China tensions might further drove some haven flows towards the USD and cap the upside for the China-proxy Australian dollar. This makes it prudent to wait for some strong follow-through buying before positioning for any near-term positive move.
The New York Times reported that the US is considering banning some or all products made with cotton from China’s Xinjiang province. Meanwhile, the US President Donald Trump on Monday ramped up his anti-Chinese rhetoric by raising the idea of de-coupling the US and Chinese economies.
In the absence of any major market-moving economic releases from the US, the USD price dynamics will influence the AUD/USD pair. Apart from this, the broader market risk sentiment might further contribute towards producing some trading opportunities around the perceived riskier aussie.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.