- The latest disappointment from the US economic data caps the attempted USD bounce.
- Renewed US-China optimism fails to impress the bulls or provide any meaningful impetus.
- Sustained move beyond the 0.70 needed to confirm any follow-through appreciating move.
The AUD/USD pair maintained its strong bid tone through the early North-American session and had a rather muted reaction to the latest US macro releases.
With investors looking past the overnight not so dovish comments by influential FOMC members and despite a follow-through US Dollar recovery, the pair regained traction and climbed to over two-week tops on Wednesday.
The positive momentum faltered ahead of the key 0.70 psychological mark and failed to capitalize on the US Treasury Secretary Steven Mnuchin's comments, saying that a US-China trade deal is about 90% complete.
Meanwhile, the USD trimmed a part of its early gains following the latest disappointment from the US economic data - showing that durable goods orders dropped 1.3% in May as compared to a fall of 0.1% expected.
Adding to this, the previous month's readings were also revised lower from the already weaker prints, which kept a lid on the greenback's attempted recovery and remained supportive of the bid tone surrounding the major.
Despite the positive factors, the pair seemed to lack any strong bullish conviction as investors preferred to stay on the sidelines ahead of the crucial Trump-Xi meeting on the sidelines of G20 summit later this week.
Hence, it would be prudent to wait for a strong follow-through momentum beyond the 0.70 handle before traders start positioning for any further near-term appreciating move beyond monthly highs, around the 0.7020 region.
Technical levels to watch
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