AUD/USD slides back closer to 0.7100 handle, US-China trade talks in focus
The AUD/USD pair faded an Asian session spike to an intraday high level of 0.7144, with bears now eyeing a follow-through weakness below the 0.7100 handle.
The pair extended the overnight retracement slide from 1-1/2 week tops and witnessed some additional selling following the release of latest RBA monetary policy meeting minutes, reiterating significant uncertainties on the economic outlook.
Meanwhile, the minutes offered little insight over the central bank's next move in interest rates, which coupled with investors' anxiety ahead of a new round of US-China trade talks, exerted some fresh downward pressure on the China-proxy Australian Dollar.
The talks follow a round of negotiations that ended in Beijing last week, which ended without a deal. Officials from both sides, however, said that the negotiation had been fruitful and generated sufficient progress on contentious issues between the two.
Meanwhile, the higher-level talks will start on Thursday and will be led by US Trade Representative Robert Lighthizer. According to the White House statement on Monday, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, economic adviser Larry Kudlow and trade adviser Peter Navarro would also take part in the talks.
With investors' focus glued on the upcoming US-China trade talks, today's relatively thin economic docket seems unlikely to provide any meaningful impetus, albeit the US Dollar price dynamics might produce some short-term trading opportunities.
Technical levels to watch
On a sustained break below the mentioned handle, the pair is likely to accelerate the fall further towards testing its next support near the 0.7060-55 region before eventually aiming to challenge the key 0.7000 psychological mark. On the flip side, the 0.7140-50 region now becomes immediate resistance, which if cleared might trigger some short-covering bounce and lift the pair towards reclaiming the 0.7200 round figure mark.