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.

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