• Escalating US-China trade war continues to weigh on the Aussie.
• Today's upbeat Aussie trade surplus data does little to lend support.
• A modest USD uptick exerts some additional downward pressure.
The AUD/USD pair weakened farther below the 0.7400 handle and refreshed weekly lows in the past hour, albeit quickly recovered few pips thereafter.
The pair extended this week's retracement slide from 0.7440 area, with a combination of negative factors exerting downward pressure for the second consecutive session on Thursday.
The US-China trade tension reemerged after the Trump administration was said to impose 25% tariffs on $200 billion of Chinese imports, as against 10% proposed earlier, and dented sentiment surrounding the China-proxy Australian Dollar.
This coupled with a modest US Dollar uptick, supported by prospects for a gradual Fed rate hike path, reaffirmed by Wednesday's FOMC monetary policy statement, further collaborated to the pair's ongoing decline.
Meanwhile, the pair found little support from today's better-than-expected Aussie trade balance data, showing a surplus of AUD 1873 million in June, and a goodish rebound in copper prices, which tend to underpin demand for the commodity-linked Australian Dollar.
Today's US economic docket, featuring the second-tier releases of weekly initial jobless claims and factory orders data, seems unlikely to provide any meaningful impetus. Hence, the focus will remain on Friday's keenly watched US monthly jobs report - NFP, which should help investors determine the pair's next leg of directional move.
The pair faced rejection near 200-hour SMA during the Asian session on Thursday and is now flirting with a short-term ascending trend-line support, which if broken should pave the way for an extension of the bearish slide.
Momentum below the mentioned support is likely to accelerate the downfall towards 0.7340-35 support area before the pair eventually drops to retest YTD lows, around the 0.7310 region.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.