AUD/USD: Trades in early Asia with bearish prospects

AUD/USD is currently trading at 0.6731, having been on the back foot overnight due to poor sentiment surrounding the forthcoming trade talks between US and Chinese officials later this week. 

AUD/USD fell from a high of 0.6773 to a low of 0.6729 on a relatively stronger US Dollar. AUD fell 40-pips ahead of Chinese markets returning along with NAB Business Conditions/Confidence data as well as Caixin Services PMI.

Trade wars a weight on AUD

Meanwhile, back to the main topic, trade, a Bloomberg story suggested that this week is not going to be as fruitful as perhaps first anticipated by some and that the Chinese delegation is unlikely to negotiate on any of the tougher areas that need a resolve which is a wight on the Aussie.

"White House advisor Kudlow said that delisting Chinese companies from US share markets was not on the table and a news report claimed that China was ready to reach agreement on selected areas, leaving difficult topics to be revisited next year,"

analysts at Westpac explained. 

As for yields, the analysts also explained that the Australian 3yr government bond yields fell from 0.54% to 0.57%, the 10yr yield from 0.85% to 0.88%. "Markets are pricing11bp of easing at the 5 Nov RBA meeting, and a terminal rate of 0.36% (RBA cash rate currently at 0.75%)."

AUD/USD levels 

Valeria Bednarik, the Chief Analyst at FXStreet explained that AUD/USD was heading into the Asian opening with a weak tone,:

"Poised to extend its decline, as, in the  4 hours chart, it is settling below its 20 SMA while the 100 SMA crosses below the 200 SMA, far above the current level. Technical indicators head firmly lower, the Momentum still holding above its 100 level and the RSI currently at 46, this last anticipating another leg lower, particularly if the pair breaks below 0.6730."