AUD/USD extends rally to fresh multi-week highs near 0.69

Despite the uninspiring trade data from China, the AUD/USD pair preserved its bullish momentum and is now building on last week's gains. As of writing, the pair, which touched its highest level since late July at 0.6873, was trading at 0.6870, adding 0.35% on a daily basis. However, the lack of fundamental drivers behind the AUD strength suggests that the pair's movements are largely technical. 

US tariffs weigh on China's trade surplus 

The General Administration of Customs of China on Sunday reported that China's exports fell 1% in August on a yearly basis while imports contracted 5.6% in the same period to reflect the negative impact of the trade dispute and dragged the trade surplus down to $34.84 billion from $45.06 billion compared to analysts' estimate of $43 billion. 

Commenting on the data, “China’s August trade data was weak, with exports and imports falling, reflecting the worsening impact of tariffs and slowing growth," TD Securities analysts said. "The trade outlook is likely to deteriorate further, with the latest intensification of tariffs having yet to be felt."

Meanwhile, the US Dollar Index started the day with a bullish gap after suffering losses last week and is making it difficult for the pair to continue to push higher for the time being. There won't be any macroeconomic data releases from the US in the remainder of the day and the pair is likely to trade in its daily range. During the Asian session, the National Bank of Australia's Business Confidence Index and Consumer Price Index (CPI) and Producer Price Index (PPI) from China will be looked upon for fresh catalysts.

Technical levels to watch for