Aussie Returns from Rollercoaster Ride – Partial Trade Deal in Play
During the last week, AUD/USD traded dramatically bullish in the wake of trade deal sentiments. The demand for Aussie remained at the peak as traders were expecting a trade deal between the US and China. Since the partial trade deal which was highly anticipated and priced in at the same time, investors are selling the Aussie to price out.
AUD/USD is falling from the double top level of 0.6800 to trade around 0.6760. Donald Trump and the Chinese counterpart Liu He met each other on Friday and, following their conference, a partial deal was declared between them. The deal involved lifting the proposed tariff on Chinese products by the US versus more US farm product purchases by China. Some distinct measures of intellectual property and grants on financial services were discussed.
China is one of Australia’s biggest trading partners, which is why the Aussie was deeply affected due to the confidence of US-China trade talks. The deal proposed extension in the Chinese market and more trade flow within Australia and China hence prompted an upward trend in the Aussie.
AUD/USD traded in a bullish trend following the news regarding the partial deal between the US & China. The bullish trend was further supported by soft macroeconomic events coming out from the United States.
Support Resistance
0.6773 0.6812
0.6752 0.6831
0.6712 0.6871
Key Trading Level: 0.6792
Technically, AUD/USD has already completed 50% Fibonacci retracement at 0.6750 regions. But the AUD/USD pair seems to violate the 50% Fibo level and may drive selling until 0.6840 level. Above this, we may see a slight buying in AUD/USD . Further violation of 0.6840 level can lead AUD/USD towards 0.6729 area today.
Good luck!
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