AUD/USD struggles near weekly lows, just above mid-0.6700s
|- US-China trade concerns continue to dent sentiment around the China-proxy Aussie.
- The USD remains supported by a pickup in the US bond yields and add to the pressure.
- Traders seemed reluctant to place aggressive bets ahead of Powell’s scheduled speech.
The AUD/USD pair lacked any firm direction on Friday and seesawed between tepid gains/minor losses near weekly lows - around mid-0.6700s.
The pair extended its sideways consolidative trading action and is currently hovering near the lower end of a broader trading range held over the past two weeks or so, awaiting a fresh catalyst. Growing market concerns over US-China trade disputes seemed to be one of the key factors holding investors from buying the China-proxy Australian Dollar.
Focus remains on Powell’s speech
This coupled with a modest US Dollar uptick - supported by a pickup in the US Treasury bond yields - further collaborated to the pair's softer tone on the last trading day of the week, though the downside remained limited ahead of the Fed Chair Jerome Powell's scheduled speech at Jackson Hole Symposium later during the North-American session.
Given that another rate cut in the September meeting is fully priced in, Powell's comments will be closely scrutinized to find out if the central bank is prepared to slash rates further. Should Powell refrain from signalling aggressive policy easing, the USD is more likely to build on its recent strength and exerted some fresh downward pressure on the major.
In the meantime, the pair seems more likely to remain confined in a narrow trading band, with a slight improvement in the global risk sentiment as depicted by a positive trading sentiment around equity markets - likely to extend some support to the perceived riskier currency Aussie and collaborated towards limiting the downside, at least for the time being.
Technical levels to watch
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