AUD/USD: Buyers cheer Trump/Mnuchin comments, eyes on Lowe’s speech
- AUD/USD extends previous recovery amid trade-positive comments from the US.
- Presence of the geopolitical tension limit pair’s run-up.
- RBA Governor Lowe’s speech, trade/political headlines will be the key.
In a reaction to the trade-positive headlines from the US, AUD/USD holds on to recovery gains while taking trading around 0.6775 during early Asian morning on Tuesday.
Aussie buyers cheer the US Treasury Secretary Steve Mnuchin’s comments confirming the Chinese Vice Premier’s trade visit to the US in the next week, coupled with the justification of Chinese delegation’s non-visit to the US farms. Adding to the optimism is the US President Donald Trump’s statement signaling China’s commitment to buy more of the US farm products.
The pair took a U-turn from multi-week low on Monday after the US-China news headlines tried calming the market doubts after the Chinese delegation hastily left the US without visiting the farms despite promising it earlier.
On the contrary, geopolitical tension surrounding the Middle East continues to restrict the pair’s upside as Iran’s Foreign Minister Javed Zarif recently turned down the global push to return to the 2015 Nuclear Deal. Also exerting the downside pressure is the US Dollar’s (USD) latest strength on the back of upbeat activity numbers and dovish comments from the European Central Bank (ECB) President Mario Draghi.
In addition to the trade/political headlines, investors will also keep an eye over the speech by the Reserve Bank of Australia (RBA) Governor Philip Lowe. Mr. Lowe is up for speaking at the Armidale Business Chamber Dinner in New South Wales. Any signals for the Aussie central bank’s action in the October meeting will be eagerly awaited.
Technical Analysis
Early-August high surrounding 0.6820, followed by 0.6845/50 and monthly top around 0.6900, act as nearby key resistances to watch during the pair’s further advances. In a case of a pullback, 0.6740/35, 0.6700 and August low near 0.6675 will be the key supports that hold the gate for a south-run towards 0.6600 mark.