AUDUSD feels relatively comfortable in the familiar range, with the immediate resistance comes at last week’s highs around the 0.72 figure, while on the downside, the selling pressure is capped by the 0.7060 handle. The short term technical outlook looks neutral, while in the longer term, the pair could face some difficulties.
The aussie feels a drag from the decision by some Chinese ports to ban imports of Australian coal. Additionally, despite the general optimism, there is now some skepticism over the prospects of striking a trade deal between the US and China, even as Trump extended the deadline on Sunday. Souring risk sentiment could boost the US dollar demand, which in turn may put the Australian currency under pressure.
Besides, there are some downside risks for AUD from RBA. The upcoming policy meeting due on March 5 will hardly bring any changes in rates, but in the month to come, the central bank may adopt a more dovish tone and cut rates in the second half of the year. Therefore, longer term prospects for AUDUSD look more bearish in this context.