AUD/USD retreats from over 1-week tops, holds above 0.6900 handle

• The post-FOMC USD bearish pressure seems to have receded and exerts some pressure.
• The latest US-China trade optimism underpins Aussie and might help limit the downside.

The AUD/USD pair failed to capitalize on the Asian session uptick to over one-week tops and is currently placed in the neutral territory, around the 0.6920-25 region. 

With investors still digesting the latest dovish shift by the FOMC, the US Dollar pushed a little higher at the start of the European trading session and was seen as one of the key factors exerting some pressure in the last hour or so.

It is worth recalling that the Fed on Wednesday clearly indicated that it remains ready to cut interest rates later this year to support economic growth, which prompted some aggressive USD selling over the past 24-hours or so.

Meanwhile, the latest optimism over a possible resolution of the prolonged US-China trade disputes continued lending some support to the China-proxy Australian Dollar and might help limit any meaningful downside.

Hence, the focus now shifts to the upcoming meeting between the US President Donald Trump and his Chinese counterpart Xi next week on the sidelines of the G20 summit in Japan.

In the meantime, Friday's US economic docket - featuring the flash manufacturing PMI and existing home sales data will now be looked upon for some short-term trading impetus later during the early North-American session.

Technical levels to watch