AUD/USD — Tricky As Risk On Hints Dip Buying

The bias for the Aussie is far from clear, as we are getting contradictory signals. The strength via the DXY is keeping the sell-side pressure alive, while the buoyant risk on appetite as depicted by the 5-DMA upward slope in the S&P 500 (orange line), alongside a higher Aus vs US bond yield spread (blue), should limit the downside as strong dip buying is likely to be quite active under this environment. Throughout last week, it became clear that 0.72/7210 is a major selling stronghold, capping the price from making further progress for the last 6 days in a row, even as the China-US trade talks are heading in the right direction. Should the US Dollar keeps its strength intact and the risk debilitate, that would be music to the ears of sellers.