- AUD/USD looks for clear direction amid cautious optimism.
- US President Trump’s trade-positive statements fail to defy broad political tension.
- US data will be in focus for intermediate direction, holiday mood to limit market moves.
AUD/USD seesaws around 0.6900 after failing to cross 200-DMA during the week-start run-up. Phase-one optimism falls short of overcoming political pessimism concerning the US-China, US-North Korea and in the Middle East.
Aussie traders initially cheered US President Donald Trump’s comments saying, "We've just achieved a breakthrough on the trade deal and we will be signing it very shortly." However, the Republican leader’s signing of the Defense Authorization Bill pushed the Chinese President Xi Jinping to warn the US to stay out of their internal matters.
The pair might also have taken care of weaker than expected 0.3% print of November month Australian Private Sector Credit to 0.1%.
Risk sentiment also gets heavy as the New York Times came out with the news stating that the US military & intelligence officials are tracking North Korea's actions by the hour & bracing themselves for a major imminent missile test.
Furthermore, news from the Syrian State Television that Israel airstrikes target Iran-linked military base in Syria exerted additional downside pressure on the market’s risk tone.
With this, the US 10-year Treasury yields step back to 1.91% whereas S&P 500 Futures stay mostly unchanged at 3,227.
Although a lack of major data/events and a year-end trading lull may hinder market sentiment, the US Durable Goods Orders, Chicago Fed Manufacturing Activity Index and New Home Sales can offer intermediate moves to entertain traders on Monday.
Technical Analysis
Buyers look for a daily closing beyond 200-Day Simple Moving Average (DMA) level of 0.6905 to challenge the monthly top near 0.6940. Alternatively, a monthly trend line, at 0.6855, restricts near-term declines of the pair.
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