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AUD/USD in search of a firm direction, stuck in a range below 0.70 handle

7/3/2019, 12:34:56 PMMarket Analysis
AUD/USD in search of a firm direction, stuck in a range below 0.70 handle

The AUD/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Wednesday.

The pair failed to capitalize on the previous session's post-RBA up-move and remained confined in a narrow trading band just below the key 0.7000 psychological mark amid resurfacing trade-war fears, shrugging off a better-than-expected Aussie housing and international trade data.

The latest optimism over the US-China trade truce turned out to be rather short-lived after the US threatened to impose tariffs on $4 billion worth of European goods, which weighed on investors' sentiment and kept a lid on any meaningful up-move for perceived riskier currencies - including the Aussie.

However, the prevailing US Dollar selling bias, weighed down by a fresh leg of a downfall in the US Treasury bond yields to fresh multi-year lows, extended some support and turned out to be one of the key factors that helped limit any meaningful downfall, at least for the time being.

Meanwhile, bullish traders seemed rather unimpressed by Wednesday's upbeat domestic data from Australia, showing that building approvals rose 0.7% month-on-month in May as against a flat reading expected and trade surplus widen to A$ 5,745 million in May from April’s A$ 4,871 million. 

Moving ahead, Wednesday's US economic docket - featuring the releases of ADP report on private-sector employment and ISM non-manufacturing PMI, will now be looked upon for some short-term trading opportunities later during the early North-American session.