AUD/USD bulls look to take charge above a now bullish 4hr 20 SMA

• AUD/USD has recovered from the opening bearish gap and is os looking to test the Friday North American sessions highs of 0.7148. 
• AUD/USD is currently trading at 0.7134, up from a low of 0.7128 and printing a high, so far, of 0.7143 ahead of a key week data wise for Aussie traders. 

AUD/USD rallied along with risk assets on Friday following news wires that a Chinese official had said there had been positive progress on trade talks that had reached consensus in principle with the US on the main topics.

However, Chinese state media on Saturday expressed cautious optimism over trade talks between the United States and China, a day after President Xi Jinping said a week of discussions had produced “step-by-step” progress, as noted by Reuters. 

“There are still obstacles to be overcome, and no one should underestimate how daunting a task the two sides face trying to resolve all the differences that have long existed between them in one clean sweep,”

the official English-language China Daily said in an editorial.

However, at least for now, there is progress. The Reuters article explained that the People’s Daily, the official paper of the ruling Communist Party, said in a commentary that Xi’s meeting with U.S. negotiators had affirmed progress made in previous talks and “injected new impetus into the next stage of the development of Sino-U.S. trade relations.”

The week ahead:

Meanwhile, the week ahead is going to be key for the Aussie following a beating due to the RBA and dovish sentiment in the markets. 

First, we the RBA minutes"

"The RBA Board statement was upbeat then Lowe's speech was neutral the next day, confusing the markets. Will the Minutes say why? The RBA semi-annual testimony is as good as the questions. We expect a discussion of the Royal Commission; whether the next move is up or down for the cash rate; China and trade; house prices always topical. AUD hasn’t been discussed for some time,"

analysts at TD Securities reported.

Then, have CFTC positioning to take note of followed by wage growth and jobs data:

"We see wage growth chipping away at rate cut expectations. We look for +0.7%/q and 2.44%/y, and closer to 2¾%/y by year-end. For Jan employment our +20k and a steady 65.6% participation rate leaves the unemployment rate at 5.0%. An average of +20k/m leaves the u-rate steady at 5% by year-end, the RBA’s f/c. The Bank will be concerned if it creeps back towards 6% again,"  

the analysts at TDS explained. 

AUD/USD levels

Valeria Bednarik, Chief Analyst at FXStreet explained, from a technical point of view, and according to the daily chart, the pair offers a neutral-to-bearish stance:

"It was unable to surpass the 20 and 100 DMA, both around 0.7145, the immediate resistance area, while technical indicators have recovered within negative levels, lacking strength enough to confirm additional gains ahead. Shorter term, and according to the 4 hours chart, however, the pair advanced above a now bullish 20 SMA, while technical indicators bounced from their midlines maintaining their upward slopes,  suggesting the pair could extend the current advance before turning back lower. The risk of a bearish extension will increase if the pair losses 0.7070 a strong static support level, already tested."