AUD/USD: Buy-Side Flows May Arise At This Juncture

Do note that even if today’s Australian data came downbeat, and the technical picture has deteriorated substantially, the micro slope in correlated asset argues for a rebound in the AUD/USD. The report of the WSJ suggesting further progress in the US/China trade negotiations has been anchoring correlated assets (Yuan, equities…). From a technical perspective, the Aussie is testing the critical support areas at 7050-7060c with the latest push lower failing miserably to extend much beyond the prior low. This is all compounding evidence that makes further downside risks limited. A resumption of the Aus--US yield spread alongside DXY rallying would negate the constructive case.