AUD/USD extends sideways grind above 0.68
- China and the US reportedly have agreed to keep yuan exchange rate stable.
- US Dollar Index rose to fresh weekly highs above 97.70 on Friday.
- AUD/USD remains on track to post weekly losses.
After testing the 0.68 handle during the Asian session on Friday, the AUD/USD pair staged a technical recovery and has gone into a consolidation phase in the 0.6820/30 region in the second half of the day. As of writing, the pair was up 0.15% on the day at 0.6828.
Trade optimism supports antipodeans
In the absence of significant macroeconomic data releases, the pair struggles to set its next short-term direction but continued to react to headlines surrounding the United States (US)-China trade dispute.
Earlier in the day, the Chinese news outlet South China Morning Post reported that the United States (US) and China have agreed to keep the yuan exchange rate stable as part of the trade deal. Additionally, Reuters reported that China was planning to ask the US to remove tariffs in exchange for additional agricultural imports to help antipodeans stay resilient against the Greenback.
Meanwhile, the only data from the US on Friday revealed that the Univesity of Michigan's Consumer Sentiment Index in its final reading improved to 95.5 in October from 93.2 in September and helped the US Dollar Index advance to a fresh weekly high of 97.81. As of writing, the index was up 0.12% on the day at 97.78.
Ahead of Wednesday's inflation report from Australia, developments surrounding the US-China trade conflict are likely to continue to drive the pair's action.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
