AUD/USD drops and finds support near 0.7100

After climbing to fresh daily highs in the 0.7130 area, AUD/USD met some selling pressure and has triggered the ongoing correction lower to the 0.7100 neighbourhood.

AUD/USD looks to US data

Spot is prolonging the multi-session sideline theme so far this week, with gains clearly capped by the 0.7130/35 band following last week's Lowe-sponsored sell-off to as low as the 0.7060 zone.

Also capping the upside, the commodity-bloc and the EM FX space continues to suffer the underlying bid tone in the greenback, exacerbated since the start of the current month.

The pair is expected to remain under pressure and looks to the greenback in light of the upcoming data releases: Retail Sales, Producer Prices and Initial Claims, all along with the speech by Philly Fed P.Harker.

What to look for around AUD

The Aussie Dollar keeps waiting for fresh headlines from the onging US-China trade talks against the backdrop of rising optimism on the probability that a deal could be clinched sooner than later. In this regard, market chatter has practically priced in an extension of the 90-day truce deadline (originally on March 1). On the not-so-optimistic side, the renewed neutral stance from the RBA should limit a more serious rally in AUD. It is worth recalling that the central bank cut its growth projections on the potential slowdown in China, the correction in the domestic house sector and potential trade jitters.

AUD/USD levels to watch

At the moment the pair is up 0.28% at 0.7107 and a breakout of 0.7135 (high Feb.13) would aim for 0.7153 (21-day SMA) and then 0.7277 (200-day SMA). On the downside, the next support lines up at 0.7075 (low Jan.25) seconded by 0.7054 (low Feb.12) and finally 0.7021 (2018 low Oct.26).