AUD/USD finds resistance ahead of 0.71, clings to small gains in early NA session
|- Renewed trade optimism helps AUD gather strength.
- US Dollar Index stays in tight range above 96.50.
- Manufacturing in NY area loses momentum.
The AUD/USD pair gained traction on Friday and rose toward the 0.71 handle after losing around 30 pips on Thursday. However, with the greenback staying resilient in the day, the pair eased from its highs and was last seen trading at 0.7075, adding 0.15% on a daily basis.
Despite reports of the U.S. looking to delay the Trump-Xi summit to late April, Chinese news agency Xinhua said that sides were able to make further progress in trade negotiations following Chinese Vice Premier Liu He's phone conversations with Treasury Secretary Mnuchin and Trade Representative Lighthizer. Renewed trade optimism during the Asian session boosted the demand for antipodeans and allowed the pair to rebound following Thursday's drop.
On the other hand, the US Dollar Index, which tracks the greenback against a basket of six major currencies, is trying to extend its recovery on Friday, forcing the pair to pull away from its daily highs. Although the NY Fed's Manufacturing Index slumped to 3.7 in March to miss the market expectation of 10 by a wide margin, the DXY is up 0.06% on the day at 96.78.
Later in the session, industrial production and the UoM Consumer Confidence Index from the U.S. will be watched closely by the market participants.
Key technical levels
The pair could face the initial support at 0.7040 (Mar. 14 low) ahead of 0.7000 (psychological level) and 0.6915 (Jan. 13 low). On the upside, resistances are located at 0.7095 (daily high/20-DMA), 0.7130 (50-DMA) and 0.7165 (Feb. 28 high).
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