AUD/USD clings to 0.6875 in search of fresh clues
- AUD/USD formed a Doji candlestick formation after the previous two days of declines.
- Risk sentiment remained mildly positive despite noises surrounding the Middle East.
- The return of the US traders and trade/political headlines will be the key to watch.
AUD/USD failed to stay near Monday’s drop to seven-day low while taking rounds to 0.6875 during early Tuesday morning in Asia. The pair seems to have been struggling between the mixed messages from trade/political front as well as the US-cantered optimism. Investors will keep eyes on Thursday’s Aussie jobs report for fresh impulse after the bushfires.
Geopolitical tension in Libya and Iraq couldn’t defy the market’s risk tone on Monday. The reason could be the longer-lasting impacts of Friday’s upbeat US data as well the International Monetary Fund’s (IMF) projections that risks have become less skewed towards the downside.
Also, news that US President Donald Trump’s lawyers urged the Senate to reject the impeachment charges against the Republican leaders might have played its role to keep the market’s little easy. Furthermore, the global leaders’ push for peace in Iraq and Libya, as well as People’s Bank of China’s (PBOC) no change in Loan Prime Rate (LPR), could have confronted the US dollar bulls.
Recently, news crossed wires that three rockets landed near the US military bases in Iraq but no casualties were reported. Elsewhere, the US-China phase-two deal talks are likely to take place a bit later after China’s Global Times reported that Beijing needs time to consider the impact of the trade deal.
With this, the market’s risk-tone remains mostly directionless awaiting the US traders’ return after Monday’s off.
Although no major data is up for publishing on the economic calendar, markets will keep eyes on the US traders’ reaction to recent trade/political headlines. It’s worth mentioning that this week’s key Aussie even is on Thursday when the Australian Bureau of Statics will release December month employment data. Ahead of that, the Australia and New Zealand Banking Group (ANZ) anticipate the Aussie GDP to remain downbeat while saying, “We think Australia’s trend rate of growth for the coming decade will be somewhere between 2.0% and 2.5% per year. This is lower than the estimates from the RBA and Treasury.”
While a lower low formation favors the pair’s grind towards a 16-week-old rising support line, at 0.6825, multiple bottoms surrounding 0.6850 can offer an intermediate halt to the pair’s declines. On the upside, buyers will look for entry beyond a 21-day SMA level of 0.6925.