- AUD / USD is one of the top-performing pairs on Friday, amid optimism in Australia-China trade relations.
- The pair is considering a retest of a previous uptrend linking the November 3 high and the November 6, 10 and 11 lows.
The AUD/USD it is trading higher, climbing 30 pips or around 0.4% as markets head towards Friday’s close, with the pair crossing above 0.7250 in recent trading.
AUD outperforms kiwi counterpart amid hopes of improving Australia-China trade relations
AUD is the third best performing G10 currency today, behind only GBP and JPY. In contrast, the NZD is currently third from the bottom on the G10 performance chart, with the NZD / USD slightly bearish for the day.
Support for the AUD against its US dollar and New Zealand counterparts were comments from Australia’s Under Secretary for Foreign Affairs and Trade during Friday’s Asia session; Christopher Langman, speaking at the Caixin Summit event in Beijing, said disruptive trade conditions between Australia and China will be resolved and Beijing will resolve “technical” issues as soon as possible.
Note that just last week, Australian media reported that Chinese importers had apparently received informal warnings from customs officials that products, such as copper ore, barley, sugar, lumber, and lobster, they will face increased inspections in the future. Commentators see China’s recent moves against Australian imports as retaliation for increasingly “anti-China” rhetoric pouring out of Australia, including the Australian government’s insistence that there should be a global investigation into the origins of the pandemic. Covid-19. So it remains to be seen whether or not Langman’s comments are a sign of better relationships in the future.
AUD / USD awaits retest of previous uptrend
AUD / USD has rebounded very well from Thursday’s weekly lows of around 0.7220. Therefore, the pair is now considering a retest of an uptrend that broke down on Thursday and linking the November 3 high and the November 6, 10 and 11 lows, which should come into play earlier. of 0.7300.
On the downside, more immediately, is the 23.6% Fib retracement between the November low (roughly 0.7000) and the high (roughly 0.7340), which comes into play just below 0.7260.
However, this level did not offer much resistance on Friday, so it is not likely to provide much support either. The best support areas to watch out for are the weekly low around 0.7220 and the 38.2% Fibonacci retracement from the November high to the low just above the 0.7200 psychological level.
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