AUD/USD: 0.7120/30 again caps the upside, trade talks in spotlight

• The much-awaited trade deal with the US could become big positive news for Australia’s largest customer, China.
• The light economic calendar also contributes to the importance of qualitative catalysts.

The AUD/USD pair again took a U-turn from 0.7130 as it trades near 0.7110 ahead of Europe open on Thursday. The Aussie pair has been trading under 0.7125/30 area since the month start. Traders may now concentrate on the on-going trade negotiations between the US and Chinese policymakers at Washington.

While the news report that the US and China are near to the much-awaited trade deal triggered the pair’s rise on Wednesday, buyers couldn’t remain on board for long. The reason being, risk sentiment witnessed a pullback ahead of final dealings between the world’s top two economies.

Recently, the Wall Street Journal reported that the US President Donald Trump may unveil plans to meet his Chinese counterpart Xi Jinping on Thursday. Investors turned cautious ahead of such announcements while both the sides are giving final touches to the trade deal in Washington.

10-year treasury yield on the US government notes witnessed a bit of pullback to 2.515% after witnessing a surge to 2.524% during early-day.

In the case of data, the US jobless claims’ figure for the week ended on March 29 seems the only one to concentrate. The number is likely to rise to 216K versus earlier week’s 211K.

Not only expected weakness in the US data and positive outcome of the US-China trade deal but forecasts for the strength in the Chinese economy after recent PMIs could also support the Australian Dollar (AUD).

AUD/USD Technical Analysis

With the 50-day simple moving average (SMA) continues to restrict the AUD/USD pair’s upside since early-month, the pair needs to overcome 0.7120/30 area in order to justify its strength in targeting 0.7150/55 resistance confluence that comprises of six-week-old descending trend-line and 100-day SMA. Also, pair’s successful trading past-0.7155 enables it to claim the 0.7200 round figure that’s close to 200-day SMA.

Meanwhile, 0.7050 is expected nearby support for the pair ahead of highlighting 0.7000 and 0.6980 figures to the south.