AUD/USD on the back foot as trade/political pessimism welcomes the new week

AUD/USD reacts to comments from the US President Donald Trump indicate souring US-China relations.
A short-term symmetrical triangle remains in play.
Traders will keep an eye over trade/political headlines amid the lack of data/events.

Anil Panchal FXStreet

While Friday’s risk recovery triggered the AUD/USD pair’s pullback, latest statements from the US President Donald Trump exert downside pressure on the Aussie as it trades near 0.6780 during early Monday morning in Asia.

The US President Donald Trump further dimmed the prospects of any meaningful progress during the September month US-China trade talks with this latest media remarks. In a nutshell, Mr. Trump treated China’s Huawei as a national threat and warning the dragon nation of negative impacts on trade negotiations if it uses the force in Hong Kong. Both of which will give a heavy workload for Chinese media to start the week with.

However, President Trump’s comments that he doesn’t see any recession, against the market fears, and that of criticizing the Fed, as usual, helped the traders remain less afraid.

The Aussie pair showed little momentum in last week amid market fears of a global economic slowdown and China data.

Given the lack of data/events scheduled for publishing, investors will keep following trade/political news for fresh impulse ahead of the Reserve Bank of Australia’s (RBA) meeting minutes and Jackson Hole Symposium.

Technical Analysis

The immediate symmetrical triangle is on the verge of breaking out the current 0.6790 – 0.6760 range, which in turn can flash 0.6825/30 and 0.6730 on the chart based upon the side of breaks. However, 0.6900 and 0.6677 are likely the key levels to watch during additional momentum.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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