AUD/USD bounces off to 0.6755 as risk sentiment improves

With the latest trade/political headlines shifting market attention from the US Dollar (USD) strength to trade-positive catalysts, the AUD/USD pair recovers to 0.6755 during early Asian session on Thursday.

Not only the US President Donald Trump’s comments signaling the trade deal with China during his latest press conference but headlines from the United Nations General Assembly (UNGA), by Japan, also favored markets’ risk sentiment.

Adding to the pullback could be the greenback’s profit-booking wave following heavy upside on Wednesday. Doubts over the future of President Trump as the US leader also seem to contribute to the USD’s recent declines.

Portraying the moves, the US 10-year Treasury yields stay positive while S&P500 Futures also refrains from declines.

Moving on, trade/political headlines, the US Gross Domestic Product (GDP) and comments from the Federal Reserve Bank of St. Louis President James Bullard and the Federal Reserve Governor Richard Clarida are likely key catalysts to watch during the rest of the day.

While no change is expected in the annualized 2.0% figure of the US Final GDP for Q2, Fedspeak will be closely observed to foresee the US Federal Reserve’s next move. Further, Aussie buyers might prefer being on the sideline ahead of the next week’s Reserve Bank of Australia (RBA) meeting after latest comments from the Governor increases the odds of another rate cut from the Australian central bank.

Technical Analysis

Pair’s repeated failures to decline below 0.6735 support including lows marked on August 14 and 23, pair’s another uptick to 0.6805/10 area including 10-day simple moving average (SMA) can’t be denied. In a case prices slip below 0.6735, 0.6700 and August month bottom surrounding 0.6675 could lure bears.