AUD/USD Current Price: 0.6993
- RBA's Monetary Policy Statement to shed some light over when the RBA may cut rates.
- US-China trade talks related headlines could also affect the pair during the upcoming session.
The AUD/USD pair trades just below 0.7000 ahead of the Asian opening, having recovered from a daily low of 0.6942 achieved at the beginning of the day. The intraday recovery was triggered by US President Trump comments, who said that a deal with China could be achieved this week, although, at the same time, he said that the US can't have China trying to renegotiate the trade deal and that his team is starting the paperwork on tariffs. Chinese inflation released at the beginning of the day resulted as expected, up by 2.5% YoY in April, having no particular effect on the pair. US-China trade talks will resume at the beginning of Friday, Asian session in Washington. Trump mixed signs have put investors in wait-and-see mode as the market can't figure out if the trade war will come to an end, or escalate in the next 24 hours. In the data front, Australia will release the RBA's Monetary Policy Statement, which could shed some light over when the RBA may cut rates. China will offer minor updates on April money developments.
From a technical point of view, the 4 hours chart shows that the upward potential remains well-limited as it trades below a directionless 20 SMA, while the 100 SMA gains bearish momentum below the 200 SMA, both well above the current level. Technical indicators in the mentioned chart have recovered from oversold levels, maintaining their upward slopes but within negative levels, indicating buyers remain cautious. The pair has bottomed twice around 0.6965 this month, which means that stops below the level should be large, therefore exposing the pair to a larger decline if those are triggered.
Support levels: 0.6965 0.6920 0.6885
Resistance levels: 0.7025 0.7070 0.7105
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