AUD/USD struggles below 0.7100 handle despite US-China trade hopes

   •  The pair did get a minor lift on the latest US-China trade-related news.
   •  Dismal Aussie data offset the positive trigger and prompts some selling.
   •  Investors now look forward to Tuesday’s RBA decision ahead of NFP on Friday.

The AUD/USD pair struggled to capitalize on the weekly bullish gap and is currently placed at the lower end of its daily trading range, just below the 0.7100 handle.

The pair gapped higher at the start of a new trading week on the back of firming hopes over a US-China trade deal, fueled by a report from the Wall Street Journal on Sunday that the world's two largest economies could reach a formal agreement at a summit around March 27. 

The uptick, however, lacked any strong follow-through, rather was sold into following the disappointing release of Aussie Q4 Company Operating Profits, coming in at 0.8% as compared to 3.0% expected and largely offset better than expected building permits data. 

Meanwhile, the prevalent risk-on mood and some renewed US Dollar weakness, despite the ongoing upsurge in the US Treasury bond yields, did little to lend any support or provide any meaningful boost to perceived riskier currencies - like the Aussie.

The price action clearly seems to suggest that the near-term bearish pressure might still be far from over. Hence, it would be prudent to wait for a sustained recovery before positioning for any further near-term up-move amid absent market moving economic releases from the US.

Market participants now look forward to this week's important event/data risk, starting with the latest RBA monetary policy update on Tuesday. This coupled with the closely watched US monthly jobs report (NFP) might further contribute towards determining the pair's next leg of a directional move.

Technical levels to watch