AUD/USD consolidates losses above 0.6900, eyes China trade data

• AUD/USD attempts recovery from 0.6938 after a three-day losing streak.
• Risk-positive headlines, concerning virus and Sino-US relations, recall the early-Monday optimism.
• Aussie NAB Numbers, Chinese Trade Balance and the US Inflation data to join risk catalysts for fresh directives.

AUD/USD retraces the heavy drop from 0.6995 to 0.6938 while bouncing off to 0.6943 amid the early Tuesday morning in Asia. The quote probes the previous three days’ losses while refraining to extend the late-US session fall. Though, buyers are waiting for the key data from China, coupled with more risk-positive headlines, for fresh entries.

Risk-off fails to last long…

Monday’s US session pessimism fades following the latest headlines suggesting weakness in the coronavirus (COVID-19) numbers from the US, coupled with likely easing of the Sino-American tension. The CNBC relied on the US health official to suggest an early cure to the pandemic whereas the American epicenter of the deadly disease, Texas, marked receding figures for the first day of the week. Further, Bloomberg came out with the news suggesting that the Trump administration officials are dropping the idea of undermining the Hong Kong dollar peg.

Based on the latest news, S&P 500 Futures kick-starts Tuesday’s session with 0.25% gains after posting around 1.0% losses on Wall Street the previous day.

Earlier on Monday, the global market cheered the hopes of further stimulus from the US. However, news that US Secretary of State Mike Pompeo defied Beijing’s claim on the South China Sea and military entering in Texas attacked optimism during the late-US session. Also weighing on the mood was the pre-earning results caution as top-tier banks are up for publishing their reports on Tuesday.

Looking forward, Australia’s National Australia Bank’s (NAB) Business Confidence and Business Conditions data for June can offer intermediate directions ahead of China’s June month trade numbers. While Aussie NAB Business Confidence could worsen to -87 from -20 prior, Business Conditions might register a bit less pessimism with -39 figures compared to -24 previous readouts. Further, China’s Trade Balance might recede from $62.93B to $58.6B even if the Imports and Exports are likely to recover from -16.7% and -3.3% to -10% and -1.5% respectively.

Considering the anticipatory positive data, coupled with the recently upbeat news, AUD/USD might again attack 0.7000 threshold. However, risk catalysts remain as the key driver to observe for fresh impetus.

Technical analysis

Unless successfully clearing 0.7000 mark, AUD/USD remains vulnerable to revisit an ascending trend line from June 15, at 0.6885. However, a 21-day SMA level of 0.6910 can offer intermediate rest during the pullback moves.