• The latest trade-related headlines prompt some fresh selling at higher levels.
• RBA rate hike speculations further collaborate towards capping strong gains.
• The focus now shifts to the Fed Chair Powell’s speech ahead of RBA minutes.
The AUD/USD pair trimmed a part of its early up-move to multi-day tops and has now retreated back closer to the 0.6900 round figure mark.
The pair opened with a weekly bullish gap as investors cheered a surprisingly positive outcome from the Australian election, wherein the incumbent government - Prime Minister Scott Morrison's conservative coalition, won a majority.
The pair touched an intraday high level of 0.6934 and was further supported by a subdued US Dollar price action, albeit lost momentum on news that China is considering suspending business with suppliers who agreed to halt supplying Huawei.
The news added to the recent concerns over a full-blown US-China trade war and exerted some downward pressure on the China-proxy Australian Dollar and was seen as one of the key catalysts behind the pair's intraday pullback of around 25-pips.
This coupled with growing bets that the RBA might cut benchmark interest rates in June further collaborated towards capping intraday gains. Hence, the focus will remain on Tuesday's important release of RBA monetary policy meeting minutes.
In the meantime, comments by influential FOMC members - including the Fed Chair Jerome Powell, might provide some insight over the central bank's intention to react to escalating trade disputes and produce some meaningful trading opportunities.
Technical levels to watch
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