- AUD/USD slips below 0.6800 as trade optimism fades, US politics trigger risk-off.
- Traders will be on the lookout for trade/political headlines amid a light economic calendar.
Given the recent challenges to the trade/political market catalysts, AUD/USD takes a U-turn from the weekly high while flashing 0.6798 as a quote during early Wednesday morning in Asia.
While initial trade-positive statements from the US President Donald Trump and Treasury Secretary Steve Mnuchin pleased Aussie buyers on early Tuesday, comments from China’s central bank governor and the US Dollar (USD) weakness offered additional strength to the pair by the day-end.
The USD had to bear the burden of markets’ risk-off sentiment after the US President Donald Trump’s comments concerning China at the United Nations General Assembly (UNGA). The risk aversion got an additional boost from the calls of an inquiry to impeach President Trump on the basis of influencing Ukrainian politics. Further, downbeat Consumer Confidence numbers, 125.1 versus 134.2 prior (revised), also added to the greenback’s weakness.
As Australian economic calendar fails to offer any key data/events for publishing, investors will keep searching for the trade/political headlines for fresh impulse. It should also be noted that the monetary policy meeting by the trading partner New Zealand’s central bank, the Reserve Bank of New Zealand (RBNZ), can also move the Aussie pair if delivering a surprise action against no rate change expectations of the global market.
On the other hand, the US economic calendar is also silent with August month New Home Sales being the only data up for publishing.
Technical Analysis
The 0.6820/25 region including 10-day simple moving average (SMA) and multiple highs marked during early August seems to restrict pair’s immediate upside towards 0.6900, which in turn highlights 0.6760, 0.6740 and 0.6700 as nearby rest-points to watch during further declines.
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