AUD/USD is back on its feet, runs into 200-hour MA

• AUD/USD regains poise, upside capped by 200-hour MA.
• Trump's retaliation could be a negotiating tactic

Having recovered from the session low of 0.7658, the AUD/USD is attempting a break above the 200-hour moving average hurdle seen at 0.7688.

Risk assets came under pressure in early Asia after news hit the wires that President Trump has asked the US Treasury to consider imposing tariffs on additional $100 billion worth of imports from China. The Dow futures fell more than 300 points, pushing the risk currencies like AUD lower. Meanwhile, the anti - risk JPY strengthened across the board.

The knee-jerk drop in the risk assets indicates the investors fear Trump's aggressive stance may undermine negotiations. However, a significant majority also believes Trump's retaliation is nothing more than a negotiating tactic.

So, the recovery in the Aussie dollar is not surprising and could an advance indicator of a possible "V-shaped" recovery in the other risk assets.

AUD/USD Technical Levels

A clear break above 0.7693 (50-hour MA) would allow a stronger rally to 0.7726 (previous day's high). A close higher would confirm a bullish reversal and open up upside towards 0.7780 (100-day MA).

On the downside, a move below 0.7674 (support on hourly chart) could yield a pullback to 0.7650 (April 2 low) and possibly to 0.76 (psychological level).