AUDUSD runs into key resistance

FX:AUDUSD   Australian Dollar / U.S. Dollar
After the flash crash that look place a week ago, AUDUSD has been on the rise due to a combination of two major drivers. First, the aussie is benefiting from improved risk sentiment amid some progress in US-China trade talks. By the way, China’s commerce ministry reported that the country is in close contact with the US over next stage of talks. Such a positive rhetoric could further support high-yielding currencies including AUD.

Second, the greenback continues to lose ground amid a more ‘dovish’ Fed tone. The FOMC meeting minutes confirmed that the central bank shifts towards a more cautious stance in policy tightening, while a number of Fed officials signal the need to make a pause in hiking. As a result, investors continue to price out rate hikes in 2019, which makes the greenback struggle nearly across the board.

Even as the buck is on the defensive, further ascent in the AUDUSD pair is under question. The price has run unto an important local resistance around 0.72 and could retreat from the current levels if crude oil prices remain under a local pressure – Brent has slipped from highs above $61 and now tries to stay above the $60 hurdle. To break the 0.72 figure, the aussie needs some fresh catalyst.