AUD/USD: Sellers cheer a lack of clarity over US-China trade relations, USD strength
- AUD/USD stays under pressure around 100-day SMA.
- US-China trade front keeps flashing mixed signals, global political uncertainty adds to the risk aversion.
- All eyes on Thursday’s Aussie employment data.
With a lack of clear direction concerning the trade relations between the US and China, AUD/USD remains under pressure while taking rounds to 0.6860 during early Asian morning on Monday.
Following the United States (US) President Donald Trump’s step back from reversing tariffs on Chinese goods, weekend headlines suggest a positive tone when it comes to the US recognition of Chinese poultry inspection, as per the Global Times. However, the Chinese media doesn’t refrain from criticizing the US trade protectionism.
Elsewhere, early results from the Spanish election confirm another hung parliament, despite far rights doubling down the seats, while Bolivian President resigns amid political turbulence and the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson seen leading in the poll for December election.
Traders have recently been lured by the US Federal Reserve (Fed) policymakers’ refrain from further dovish statements amid mostly upbeat data. However, this week’s inflation numbers and the Fed Chair’s testimony will be the key to watch.
The US 10-year treasury yields closed at the highest since July around 1.92% whereas S&P 500 Futures stays directionless by the press time.
On the other hand, the Aussie employment report on Thursday will also be the key after recently mixed clues from the Reserve Bank of Australia (RBA).
It's worth mentioning that the US market's are closed on Monday due to the Veterans Day Holiday and hence a lack of momentum could be witnessed during the generally active session.
Technical Analysis
A sustained break below 100-day Simple Moving Average (SMA) level of 0.6848 could trigger pair’s drop to the late-October lows near 0.6810 while pair’s near-term upside keeps finding it hard to cross 200-day SMA level of 0.6943.