AUD/USD sticking to 0.71 as traders play wait and see

The Aussie continues to cycle as traders await a meaningful impetus amidst trade war concerns.
Aussie jobs data due later this week, but the in-between faces a data vacuum.

Joshua Gibson FXStreet

The AUD/USD is still trading just north of the 0.7100 handle after dragging its heels through Monday's action, kicking off the new week in an unsteady stance and ending the first day flat.

Chines inflation figures yesterday came in better than expected, but were unable to shake markets out of their trade-stress as traders keep one foot in safe-haven assets while bracing for further trade war tariffs, and the mid-week is a calm showing for the Aussie, with nothing meaningful on the economic calendar until Thursday, when Australia's latest jobs report drops on the Pacific-Asia trading session.

With interest rates currently holding steady in the AUD/USD's differential, a near-term long position on the Aussie is becoming an increasingly attractive offer for market participants, which could be helping to provide some support for the AUD/USD, which has been in an established downtrend for some time now.

With trade angst hanging close to the surface, any bullish recovery could see a quick turnaround if risk sentiment gets sewered by another round of tariffs in the US-China trade war, which threatens to spill over again any day now.

AUD/USD levels to watch

According to FXStreet's own Valeria Bednarik, the Aussie is still facing downside pull in the charts: "the pair maintains its bearish potential intact, with scope to extend the ongoing downward move to 0.6826, January 2016 monthly low, as the latest consolidation has helped the pair to correct part of its extreme oversold conditions. Short-term, and according to the 4 hours chart, the pair has stalled its intraday recovery well below firmly bearish moving averages, while technical indicators resumed their declines after an upward corrective movement within negative levels, the Momentum now at fresh 1-week lows and the RSI at 36."

Support levels: 0.7095 0.7065 0.7030

Resistance levels: 0.7140 0.7180 0.7210

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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