AUD/USD extends the bounce above 0.6750 on trade optimism

Aussie lifted by US-China trade deal hopes-led risk-on amid full markets.
Downbeat China Caixin Services PMI ignored, as focus shifts to US data, Powell.

Dhwani Mehta FXStreet

The AUD/USD pair found support once again at Monday’s low of 0.6729 and staged a solid comeback from there, now looking to extend the bounce above the 0.6750 level amid a return of the full markets.

US-China trade optimism boosts risk

The higher-yielding and China proxy, the Aussie dollar, was lifted by the risk-on action in the Asian equities and US equity futures, as markets remain hopeful that the US-China trade talks due later this week will be successful.

This comes after the White House Adviser Kudlow said that it was possible to see progress made this week. Meanwhile, the US President Trump’s upbeat comments on trade also helped the bulls. Trump noted: "We think there's a chance we could do something very substantial."

Adding to the recovery in the spot, the US dollar remains broadly weaker amid reduced safe-haven flows while the Aussie cheered an uptick in the NAB Business Conditions data and shrugged-off the dismal Chinese Caixin Services PMI data. The Chinese Services sector activity declined to 51.3 in September vs. 52.9 expected and 52.1 last.

Attention now turns towards the US Producer Price Index (PPI) and Fed Chair Powell’s speech for fresh trading impulse. Meanwhile, any development on the US-China trade front will emerge as the main driver for the pair.

AUD/USD Technical levels to watch

AUD/USD

Overview
Today last price	0.6755
Today Daily Change	0.0022
Today Daily Change %	0.33
Today daily open	0.6733

Trends
Daily SMA20	0.6791
Daily SMA50	0.6784
Daily SMA100	0.6872
Daily SMA200	0.6986

Levels
Previous Daily High	0.6771
Previous Daily Low	0.6729
Previous Weekly High	0.6776
Previous Weekly Low	0.667
Previous Monthly High	0.6895
Previous Monthly Low	0.6687
Daily Fibonacci 38.2%	0.6745
Daily Fibonacci 61.8%	0.6755
Daily Pivot Point S1	0.6718
Daily Pivot Point S2	0.6702
Daily Pivot Point S3	0.6676
Daily Pivot Point R1	0.676
Daily Pivot Point R2	0.6786
Daily Pivot Point R3	0.6802

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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