AUD/USD spikes to 0.7290 on new Australian leadership

• Aussie lifted by Australian new leadership, rises a quarter of a cent.
• But upside remains capped by 0.73 handle amid US-China trade frictions.

The AUD/USD pair broke its bearish consolidation to the upside in the Asian trades this Friday, after the Australian dollar caught a fresh bid-wave following the news that the Australian Treasurer Morrison is won a three-way battle to become the new Australian Prime Minister (PM).

The Aussie jumped more than 50-pips on the news, as the Australian financial markets view Morrison as the best outcome. Sky News reported that Morrison defeated Dutton 45-40, a smaller margin than Turnbull-Dutton earlier in the week (48-35).

However, the bulls quickly lost ground amid ongoing US-China trade spat, leaving the pair in a consolidative mode around 0.7275 levels. The latest US tariffs to collect 25% duties on China’s imports kicked-in on Thursday. However, the Chinese Commerce Ministry noted earlier today that both sides had a constructive and candid exchange over trade issues.

In the day ahead, markets will continue to digest the new Australian leadership news while the US durable goods data and Fed Chair Powell’s speech could offer  fresh trading impetus.

AUD/USD Technical Levels

Resistances: 0.7316 (5-DMA), 0.7350 (psychological levels), 0.7375 (50-DMA).

Supports: 0.7253 (Aug 17 low), 0.7200 (round number), 0.7162 (Jan 2017 lows).