President Trump stated on Tuesday that, if needed, the U.S. could impose additional tariffs on Chinese goods nW1N21900R.
The comment soured risk sentiment which sent emerging market currencies lower versus the greenback and USD/CNH CNH= up toward 6.8850 nL4N24I0Z6.
As a result, AUD/USD slid toward its 10-DMA today.
However, bids into the 0.6990 area coupled with a reversal in the greenback's rally stemmed the tide, putting Aussie bulls back in the game.
The bounce has resulted in a hammer candle forming near the 10-DMa along with the daily RSI turning up.
Meanwhile, the body of July's candle has shrunk which helps lengthen its lower wick and strengthen its positive implications.
Indeed, the signs suggest bulls are flexing their muscles ahead of Australian jobs data due Thursday.
Should the employment and unemployment rate components of the report suggest Australia's job market is on solid ground, short-term rates could rise as the chances of RBA cuts diminish RBAWATCH.
Since Australian 3-month bank bill futures still suggest one more RBA rate cut in the current cycle, a robust jobs report could drive AUD/USD above 0.7050/70 resistance and trigger stops.
A test of the 200-DMa and 0.7140/60 resistance zone is then likely.
chart: Click here