AUD/USD bears remain in control near 0.6920 despite fewer catalysts
|- Pessimism surrounding global trade and politics confines moves amid no major data.
- Increase in Iron ore and return of the US traders can entertain market players.
The AUD/USD pair is taking the rounds near 0.6920 during the early Asian session on Tuesday. Despite the US holiday-led inactivity, the quote remained largely suppressed as political tension amid the US and China weighed on the Aussie.
While the US President Donald Trump’s statement showing lack of readiness to make a trade deal with China initially prompted the sellers, China’s response, as conveyed via state media, further strengthened the case of a no trade deal among the global giants.
With the Aussie generally considered as a global risk barometer, downbeat market sentiment led by the EU election results could also be the reason for the pair’s latest decline.
Looking forward, Australia’s weekly ANZ-Roy Morgan consumer confidence release will be the first to entertain traders ahead of an active day to be marked by the return of the US players. It should also be noted that the US housing market index and consumer confidence figure might add fuel into the likely volatile session ahead.
At the political front, the US-China stalemate is likely to remain for a bit longer while developments from the US-Japan discussions could offer intermediate trade opportunities.
Furthermore, prices of Australia’s largest export item Iron Ore has recently been higher on the back of supply constraints, which in turn could confine the Aussie’s downside.
Technical Analysis
Sustained break of 0.6935/40 becomes prerequisite for the quote to aim for 0.7000 and 50-day simple moving average (SMA) level of 0.7045.
Meanwhile, 0.6900 and 0.6860 can entertain near-term sellers ahead of pleasing them with the 2016 low near 0.6830.
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