- Escalating geopolitical tensions in the Middle East exerted some pressure earlier this Monday.
- US-China trade optimism continues to underpin the Aussie and helped regain some traction.
- The upside is likely to remain limited ahead of RBA minutes on Tuesday and FOMC meeting.
The AUD/USD pair quickly reversed the weekly bearish gap opening, albeit struggled to extend the momentum and remained well within a broader trading range held over the past one-week or so.
After last week's repeated failures ahead of the 0.6900 handle, the pair opened with a mild bearish gap at the start of a new trading week in reaction to escalating geopolitical tensions in the Middle East. The weekend attacks on Saudi Arabian refining facilities triggered a fresh wave of the global risk-aversion trade and weighed on perceived riskier currencies - like the Australian Dollar.
Trade optimism attract some dip-buying
However, the recent optimism over the resumption of US-China trade talks and encouraging trade-related developments continued attracting some dip-buying interest around the China-proxy Aussie, which coupled with a subdued US Dollar price action - despite a follow-through uptick in the US Treasury bond yields - remained supportive of the pair's intraday uptick of around 20-pips.
The up-move seemed rather unaffected by the disappointing Chinese macro releases, showing that Chinese retail sales rose 7.5% year-on-year rate in August as compared to 7.9% expected and industrial production slowed further to 4.4% in August from 4.8% in July.
Meanwhile, bulls seemed lacking any strong conviction, rather refrained from placing any aggressive bets and preferred to wait on the sidelines heading into the upcoming key event risk - the highly anticipated FOMC monetary policy meeting later this week on September 17-18.
The Fed is widely expected to cut interest again on Wednesday, though opinions on aggressive easing remain divided and should lead to some unusual volatility during the second half of this week/assist investors to determine the pair's next leg of a directional move.
In the meantime, the broader market risk sentiment and the USD price dynamics might be looked upon for some short-term trading opportunities amid absent relevant market-moving US economic releases and ahead of the RBA policy meeting minutes, due to be released during the Asian session on Tuesday.
Technical levels to watch
|Today last price||0.6877|
|Today Daily Change||-0.0001|
|Today Daily Change %||-0.01|
|Today daily open||0.6878|
|Previous Daily High||0.6891|
|Previous Daily Low||0.6856|
|Previous Weekly High||0.6895|
|Previous Weekly Low||0.6837|
|Previous Monthly High||0.6869|
|Previous Monthly Low||0.6676|
|Daily Fibonacci 38.2%||0.6878|
|Daily Fibonacci 61.8%||0.6869|
|Daily Pivot Point S1||0.6859|
|Daily Pivot Point S2||0.684|
|Daily Pivot Point S3||0.6824|
|Daily Pivot Point R1||0.6894|
|Daily Pivot Point R2||0.691|
|Daily Pivot Point R3||0.6929|
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.