The aussie gained on headlines that China is considering purchasing more US agriculture products earlier
AUD/USD got about a 15-20 pips pop on the news as price challenged and broke above the 100-hour MA (red line) @ 0.6997 as well as offers around 0.7000.
The move higher came after the headlines here though I’m not convinced that we’re any closer to a US-China trade deal solely based on the aforementioned report. But I guess it beats having bad news and markets are still in “anticipation mode” awaiting fresh details on how trade talks are progressing since the weekend.
I reckon that’s helping a bit with the risk mood with US equity futures also up by 0.2% now to session highs. That said, I’m still looking at the bond market to reaffirm any change in risk sentiment and so far yields are off the lows but they are still holding weaker today.
As for AUD/USD, the move above the 100-hour MA is a good starting point for buyers as they now establish a more near-term bullish bias. However, there is key resistance from the gap higher this week @ 0.7036 as well as the 100-day moving average @ 0.7034. Those will be key levels to breach in order to extend any further upside move in my view.
If there are more positive trade headlines to follow in US trading, perhaps we could see those levels tested but for now I’m still a bit doubtful of price breaching that area based on the story earlier alone.
Without any follow-up, I would argue that price will move back towards the key hourly moving averages again but we’ll see what the technical levels say in the session ahead.