AUD/USD stays on the back foot as risk sentiment ignores latest US-China story

AUD/USD seesaws around three week low as risk tone remains compressed.
The sustained strength of the greenback, cautious mood ahead of the next week’s RBA.
Trade political headlines mixed, Fedspeak signals mild hawkish outlook among policymakers.

Anil Panchal FXStreet

With no major reaction to the recent trade-positive headlines, AUD/USD takes the rounds to 0.6750 during initial Friday morning in Asia.

Markets show less response to the CNBC story saying that the US-China trade talks will resume on October 10-11 in Washington. The reason could be the Trump administration’s lack of surprise and doubts over any breakthrough as the White House recently signaled no extension to the Huawei sanction relief to the US businesses, as per the Bloomberg.

Uncertainty surrounding the US President Donald Trump’s future and geopolitical tension between the US and Iran also negatively affect the risk-tone.

It’s worth not missing out on the US Dollar’s (USD) overall strength that might have relied on the recent positive comments from the US Federal Reserve officials. The Fed’s Vice Chairman Richard Clarida and Dallas Fed President Robert Kaplan could be spotted for reference.

Further to note is the news report stating the Pentagon’s readiness to send the military to Saudi Arabia.

Looking forward, a lack of data/events could continue weighing on the pair ahead of the next week’s monetary policy meeting by the Reserve Bank of Australia (RBA). The Aussie central bank is almost certain to deliver 0.25% rate cut on October 01. However, the US Durable goods Orders, Michigan Consumer Sentiment and Personal Consumption data might entertain short-term traders during the later part of the day.

Technical Analysis

One-week-old falling trend-line, around 0.6780, followed by 21-day simple moving average (SMA) near 0.6810, could keep exerting downside pressure on prices towards 0.6700 and 0.6675.

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.

GBP/USD trims losses, disputes 1.3400

GBP/USD retreats after reaching a three-week high above 1.3430 and puts the 1.3400 region to the test on Thursday. Although easing political uncertainty in the UK helps the quid limit its downside, escalating tensions in the Middle East support the Greenback, keeping Cable under scrutiny.

EUR/USD off highs, back to 1.1430

EUR/USD loses momentum after briefly climbing to the 1.1450 area earlier in the day, revisiting the 1.1430 region on Thursday. Escalating tensions in the Middle East fail to underpin the US Dollar, although a broad sense of caution continues to prevail among market participants.

Gold climbs to two-day peaks near $4,130

Gold stages a modest rebound on Thursday, setting aside a three-day losing streak and managing to surpass the $4,100 mark per troy ounce. However, steady geopolitical tensions have revived concerns over persistently high global inflation, reinforcing expectations of higher rates across the board and somewhat curtailing the yellow metal’s upside potential.

Bitcoin stalls as mixed ETF flows, renewed US-Iran tensions cap upside

Bitcoin trades at $63,000 on Thursday, recovering slightly after facing rejection near $64,000. Renewed geopolitical uncertainty has dampened risk appetite, limiting BTC upside potential.

Japan may be changing its Yen strategy, but markets don’t look scared

Japan may be changing its intervention playbook, but that might not be enough to rescue the battered Yen. With USD/JPY hovering at four-decade highs, the currency’s weakness is being driven less by speculative pressure and more by a powerful structural force: the wide US-Japan rate gap.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.