The AUD/USD has seen a bit of upside in early Asian trade, but it looks to me like we are starting to see some lower Christmas volumes being done.

There were a couple of bits of data out today, that showed slightly lower business conditions and confidence, which is probably an accurate reflection of the sentiment in Australia at the moment.

At the same time, there have also been reports of a phone call between US and Chinese officials as the two countries move towards a deal on trade.

The news has seen the Aussie drift higher, but ranges are still quite tight across all the majors this morning.

Aussie Outlook

So far the AUD/USD is pushing higher, but we are well off the key resistance level of 0.7300 that we saw last week.

The AUD/USD dropped to the major level at 0.7200 and so far is holding up around that point.

We broke through there recently and have basically retested that point. We are really at an inflection point here at the moment and I would be tempted to simply go with the winner of the battle at 0.7200.

Given the time of year, I’m actually more tempted to sit on the sidelines and wait or look for more mean-reversion as opposed to breakout trades.

0.7200 is up and holding for now.