- AUD/USD struggled to build on the previous day’s goodish intraday positive move.
- A softer risk tone capped gains, US-China trade optimism helped limit the downside.
- Investors eye US Durable Goods Orders for some impetus ahead of Powell’s speech.
The AUD/USD pair lacked any firm directional bias on Wednesday and remained confined in a range around the 0.7200 mark through the Asian session.
The pair failed to capitalize on the previous day's goodish bounce of around 50 pips from mid-0.7100s and witnessed a subdued/range-bound price action through the first half of the trading on Wednesday. A slight deterioration in the global risk sentiment was seen as one of the key factors that capped the upside for the perceived riskier Australian dollar.
Tuesday's disappointing release of the US Consumer Confidence Index fueled worries about the US economic recovery and partly offset the optimism over a potential vaccine/treatment for the highly contagious coronavirus diseases. This, in turn, weighed on investors' sentiment and drove some haven flows towards the US dollar.
However, easing concerns about a diplomatic standoff between the US and China extended some support to the aussie. This coupled with investors' reluctance to place any aggressive bets ahead of the Fed Chair Jerome Powell's speech at the Jackson Hole Symposium might further contribute to limit any meaningful slide for the AUD/USD pair.
Hence, it will be prudent to wait for some strong follow-through selling before positioning for any further depreciating move. Even from a technical perspective, the pair, so far, have managed to defend a support marked by the lower boundary of a one-month-old ascending trend-channel, warranting some caution for bearish traders.
Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders. The data might influence the USD price dynamics and provide some short-term trading impetus later during the early North American session.
Technical levels to watch
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