AUD/USD eases from 2-1/2 week tops, back around mid-0.7100s
• US-China trade optimism continues to underpin China-proxy Aussie.
• Subdued USD price-action remained support of the positive mood.
• Further gains remain capped ahead of the FOMC meeting minutes.
The AUD/USD pair trimmed a part of its early gains to 2-1/2 week tops and has now retreated back to mid-0.7100s.
After yesterday's brief pause, led by softer Aussie trade balance data, the latest optimism over the progress in US-China trade talks underpinned the China-proxy Australian Dollar and assisted the pair to build on its the post-flash-crash recovery from almost a decade low.
The positive momentum seemed unaffected by today's disappointing release of Aussie housing market data, showing building approvals fell 9.1% m/m in November, rather took cues from positive commodity prices and some renewed US Dollar weakness.
The greenback failed to build on the overnight goodish up-move and continues to be weighed down by growing market expectations that the Fed will slow the pace, or perhaps even pause its monetary policy tightening cycle in 2019.
Hence, the focus will remain glued to the release of latest FOMC meeting minutes, due later during the US trading session, which if signals a dovish outlook might prompt exert some fresh downward pressure on the buck and pave the way for additional near-term up-move for the major.
Technical levels to watch
Any meaningful retracement is likely to find decent support near the 0.7110-0.7100 region, below which the pair is likely to accelerate the fall towards 0.7070 level en-route 0.7030 horizontal zone and the key 0.70 psychological mark. On the flip side, immediate resistance is now pegged near 50-day SMA, around the 0.7185-90 region, which if cleared should lift the pair further beyond the 0.7200 handle towards challenging the 0.7235-40 supply zone.