AUD/USD Review: Struggles to build on last week’s recovery move, on offers near 0.73 handle
| • Fading optimism over fresh US-China trade talks weighs on the China-proxy Aussie.
• A modest USD uptick/weaker copper prices further collaborate to the offered tone.
The AUD/USD pair traded with a mild negative bias through the Asian session on Monday and has now moved on the verge of breaking back below the 0.7300 handle.
The pair struggled to build on last week's goodish rebound from near 20-month lows and was being capped by a modest US Dollar uptick amid fading optimism over fresh US-China trade talks.
This coupled with a slightly weaker tone around copper prices also did little to support the commodity-linked currency and exerted some downward pressure at the start of a new trading week.
In absence of any major market moving economic releases on Monday, the USD price dynamics and broader market risk sentiment might continue to act as key determinants of the pair's momentum ahead of the RBA Governor Lowe’s speech and RBA monetary policy meeting minutes on Tuesday.
This coupled with minutes from the latest FOMC monetary policy meeting, due for release on Wednesday, would further assist investors to determine the pair's next leg of directional move.
Technical Analysis
Looking at the technical picture, the recovery move stalled near an important horizontal support now turned resistance and hence, it would be prudent to wait for a convincing move beyond the mentioned barrier before confirming that the pair might have bottomed out in the near-term.
Momentum beyond the mentioned barrier is likely to accelerate the up-move and assist the pair to aim towards reclaiming the 0.7400 handle, 50-day SMA, with some intermediate resistance near the 0.7345-50 region.
Alternatively, a break below 0.7275-70 immediate horizontal support might negate prospects for any further recovery and turn the pair vulnerable to resume with its prior depreciating move.
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