AUD/USD chart on Trading View used for analysis
- AUD/USD grinds higher to test 0.72 handle as the Australian dollar remains buoyed on renewed US-China trade optimism.
- The US Treasury Secretary Steven Mnuchin told reporters that Chinese Vice Premier Liu will most likely visit the US later this month for higher-level trade negotiations.
- AUD/USD is trading 0.24% higher on the day at 0400 GMT. Intraday bias higher.
- Momentum studies ar bullish, but daily cloud is capping upside. Break above cloud base could see further gains.
- Scope then for test of 0.7335 (converged 200-DMA and trendline resistance).
- Rejection at cloud with break below 21-EMA support could see resumption of weakness.
- Focus on US inflation data due later today for further impetus. Analysts expect headline and core CPI to be unchanged.
- Stable inflation is likely to support new Fed rate caution, lowering the odds for a first half rate hike, weighing on the dollar and adding upside support to the major.
Support levels - 0.7169 (5-DMA), 0.7133 (21-EMA)
Resistance levels - 0.7207 (cloud base), 0.7335 (converged 200-DMA and trendline resistance)
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