AUD/USD on the back-foot near mid-0.6400s
- AUD/USD edged lower on Friday amid softer risk tone, weaker Chinese macro data.
- The USD struggled to build on the overnight positive move led by Trump’s comments.
- Investors now look forward to the release of US Retail Sales data for a fresh impetus.
The AUD/USD pair failed to capitalize on the previous day's late rebound from one-week lows and came under some fresh selling pressure on Friday. The pair was last seen trading near the lower end of its daily trading range, around mid-0.6400s.
Deteriorating US-China relations overshadowed the recent optimism over the re-opening of economies in some parts of the world. This comes amid fears over the second wave of coronavirus infections and fading hopes of a quickly global economic recovery and continued weighing on investors' sentiment.
The softer risk tone, along with weaker-than-expected Chinese macro data exerted some downward pressure on the China-proxy Australian dollar. The downtick lacked any strong follow-through selling and remained limited, at least for the time being, amid a subdued US dollar price action
The greenback struggled to extend the overnight gains led by US President Donald Trump's comments. In an interview with Fox Business Network, Trump said that it is good to have a strong dollar and that it will help the economy during the recovery post coronavirus crisis.
Commenting on trade relations with China, Trump reiterated that he will not be renegotiating the trade deal. Hence, it will be interesting to see if the pair is able to find any support at lower levels or the recent pullback from the 0.6560-70 supply zone marks the end of a strong recovery from multi-year lows set in March.
Moving ahead, market participants now look forward to the US economic docket, highlighting the release of monthly Retail Sales figures. The data will influence the USD price dynamics and contribute towards producing some meaningful trading opportunities later during the early North American session.
Technical levels to watch