AUD/USD struggles below mid-0.7100s amid caution over US-China trade talks

Haresh Menghani FXStreet

• Renewed uncertainty over US-China trade negotiations weighs on Aussie.
• Disappointing Chinese manufacturing PMI adds to the selling pressure.
• Subdued USD demand helped limit the downside ahead of US macro data.

The AUD/USD pair faded an early Asian spike to a session high level of 0.7166 and is currently placed at the lower end of its daily trading range.

Against the backdrop of Wednesday's not so optimistic trade-related comments by the US Trade Representative Robert Lighthizer, the pair was further weighed down by today's weaker than expected Chinese manufacturing PMI print for February.

In his testimony to House Ways and Means Committee on Wednesday, Lighthizer said that it was too early to predict an outcome in U.S.-China trade negotiation and exerted some fresh downward pressure on the China-proxy Australian Dollar.

Meanwhile, dismal Chinese manufacturing data provided further evidence that US-Sino trade dispute was taking a toll on the global economic growth, which along with escalating geopolitical tensions between India and Pakistan further collaborated towards driving flows away from perceived riskier currencies - like the Aussie.

A fresh wave of global risk-aversion trade was evident from a sharp fall in the US Treasury bond yields, which failed to assist the US Dollar to build on the overnight bounce from three-week lows and helped limit deeper losses, at least for the time being.

It, however, remains to be seen if the pair is able to attract any buying interest or continues with its lacklustre trading action as the focus now shifts to the US economic docket, highlighting the release of advance US Q4 GDP growth figures.

This coupled with the release of the Fed's preferred measure of inflation - core PCE, and other second-tier US economic data might influence the USD price dynamics and further collaborate towards producing some meaningful trading opportunities later during the early North-American session.

Technical levels to watch

AUD/USD

Overview:
    Today Last Price: 0.7142
    Today Daily change %: 0.06%
    Today Daily Open: 0.7138
Trends:
    Daily SMA20: 0.7149
    Daily SMA50: 0.7133
    Daily SMA100: 0.7165
    Daily SMA200: 0.7257
Levels:
    Previous Daily High: 0.7199
    Previous Daily Low: 0.7127
    Previous Weekly High: 0.7207
    Previous Weekly Low: 0.707
    Previous Monthly High: 0.7296
    Previous Monthly Low: 0.6684
    Daily Fibonacci 38.2%: 0.7155
    Daily Fibonacci 61.8%: 0.7172
    Daily Pivot Point S1: 0.711
    Daily Pivot Point S2: 0.7083
    Daily Pivot Point S3: 0.7039
    Daily Pivot Point R1: 0.7182
    Daily Pivot Point R2: 0.7226
    Daily Pivot Point R3: 0.7254

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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