AUD/USD stays range bound as traders await fresh clues from Jackson Hole

With the absence of catalysts other than the US-based optimism concerning a trade deal with China, AUD/USD takes the rounds to 0.6760 during the initial Asian session on Friday.

The Aussie pair declined, following other commodity-linked currencies’, on the previous day as activity numbers from global powerhouses like the US, Japan, Germany, and the EU, flashed signs of a contraction.

Fears of global recession have been weighing over market sentiment off-late, which in turn drags risk assets like the Australian Dollar (AUD). The inverted yield curve of the US two-year and 10-year notes recently increased the odds of an upcoming economic slowdown.

However, the pair repeatedly bounces off 0.6745 amid positive signals concerning the US-China trade deal and traders’ wait for fresh clues concerning the Reserve Bank of Australia’s (RBA) next policy move.

After the US President Donald Trump’s frequent tweets suggesting positive developments at the trade talks with China, the White House Economic Adviser Larry Kudlow recently spoke in favor of September month’s (expected) trade-talks. Though, investors have turned skeptical of the US-based optimism as no Chinese officials have been upbeat recently.

As no major data is scheduled for release, except for speeches from the Jackson Hole Symposium, markets will be all ears to the headlines from the key event. It should be noted that the RBA Governor Phillip Lowe will be up for a speech at the Symposium on early Saturday in Asia.

Technical Analysis

Traders will be on the lookout for either side breaks of 0.6745-0.6822 range before taking any big positions. During the breakout, June low of 0.6831 can question the upside towards 0.6860/65 area whereas 0.6745, 0.6700 and monthly bottom around 0.6677 may please sellers in a case of the declines.