AUD/USD PRICE OUTLOOK: AUSTRALIAN DOLLAR RALLIES DESPITE US-CHINA TRADE UNCERTAINTY ESCALATING STILL
- AUD/USD price action advanced on Tuesday as the Nasdaq notched a fresh record close
- Australian Dollar bulls steered spot AUD/USD higher amid fading risk aversion
- Trader sentiment overlooks inconsistent US-China trade deal remarks from Trump and Navarro
The Australian Dollar gained ground on Tuesday as major safe-haven currencies, like the US Dollar, declined. AUD/USD price action extended another 22-pips higher in an extension of the prior trading session’s 73-pip rally. Spot AUD/USD has gyrated broadly over the last 24-hours, however. This comes largely in the wake of latest US-China trade commentary from President Donald Trump and Trade Adviser Peter Navarro.
AUD/USD & USD/CNH PRICE CHART: 5-MINUTE TIME FRAME (23 JUNE 2020 INTRADAY)
Chart created by @RichDvorakFX with TradingView
The pro-risk Australian Dollar whipsawed alongside the offshore Chinese Yuan (CNH) after White House trader adviser stated that the US-China phase one trade deal is over. Navarro subsequently walked back his hawkish language, which provided relief to the sharp but short-lived drop recorded by AUD/USD price action.
The recovery continued when Trump confirmed on his personal Twitter account that the “China trade deal is fully intact” and added that he is hopeful China “will continue to live up to the terms of the agreement.” Meanwhile, President Trump, in addition to several other White House officials, have recently noted the possibility of a ‘complete decoupling’ from China, in an apparent escalation in Sino-American trade war rhetoric.
AUD/USD PRICE CHART: DAILY TIME FRAME (18 FEB TO 23 JUN 2020)
Nevertheless, the lack of a tangible breakdown in US-China trade relations likely contributed to the latest wave of risk appetite helping push AUD/USD prices higher. The latest bounce by spot AUD/USD reiterated the bullish trendline extended through a series of higher lows since mid-March. That said, the impending Bollinger Band squeeze could stymie a sustained advance potentially set forth by the Australian Dollar.
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-- Written by Rich Dvorak, Analyst for DailyFX.com
Connect with @RichDvorakFX on Twitter for real-time market insight
