AUD/USD on a steady decline to 0.7050 ahead of US data

• Dollar strength, souring risk sentiment weighs down on the Aussie.
• Rally in oil, copper prices slows the fall, as focus shifts to US Consumer Sentiment data.

The AUD/USD pair is on a gradual decline so far this Friday, extending the correction from three-month tops of 0.7082 reached in early Asia.

The spot is seen meandering near daily lows just below the midpoint of the 0.70 handle, as the demand for US dollar when compared to its main rivals remains undisputed, in the wake of less aggressive calls for a July rate cut by the Fed officials.

Moreover, a lack of substantial details about the telephonic conversation between the US and Chinese trade teams combined with no updates on the likely in-person trade meeting left investors in limbo, as they preferred taking profits off the table heading into the key US data and weekly closing.

Despite the corrective move lower, the commodity continues to derive support from the rally in oil and copper that helped slow the pace of declines. Looking ahead, the risk remains to the downside, as the US dollar recovery is likely to strengthen further, with the US Michigan Consumer Sentiment Index seen higher at 98.5 in July vs. 98.2 previous.

Also, any fresh developments around the US-China trade spat and Fedspeak will have a major influence on the price action.

Levels to watch