AUD/USD turns negative for the day, refreshes daily low near 0.6520 area
|- A modest recovery in the risk sentiment failed to assist AUD/USD to capitalize on the early uptick.
- Concerns about worsening US-China relations capped the upside and prompted some fresh selling.
- Market worries further benefitted the USD’s safe-haven status against its Australian counterpart.
The AUD/USD pair struggled to capitalize on the early uptick to mid-0.6500s and has now dropped to the lower end of its daily trading range.
Having found some support near the key 0.6500 psychological mark on Friday, the pair managed to regain some positive traction on the first day of a new trading week. The uptick was supported by a modest recovery in the global risk sentiment, which tends to benefit perceived riskier currencies – like the aussie.
However, concerns about a further escalation in diplomatic tensions between the world's two largest economies kept a lid on any strong gains for the AUD/USD pair. It is worth recalling that the US President Donald Trump has threatened a strong reaction if China imposes new national security laws on Hong Kong.
The market worries continued benefitting the US dollar's perceived safe-haven status, which further contributed to the pair's intraday pullback of around 30 pips. The AUD/USD pair was last seen trading in the red for the third consecutive session, albeit relatively thin liquidity conditions might help limit deeper losses.
Hence, it will be prudent to wait for some strong follow-through selling, possibly below the 0.6500 mark, before positioning for any further near-term depreciating move. In the meantime, the AUD/USD pair seems more likely to remain confined in a narrow trading band amid the Memorial Day holiday in the US.
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.