AUD/USD Forecast: RBA meeting and Chinese data could be the so-long awaited catalyst

• RBA meeting and Chinese first-tier events next week have some chances of waking the pair out of its lethargy.
• Sentiment toward the AUD/USD turns increasingly bearish, although price not seen moving too far away.

And there goes the AUD/USD pair to close a seventh consecutive week at around 0.7400. The constant bombarding of trade war headlines opposes to dominant dollar's strength, leaving the pair directionless. There was a brief hope for bears early Friday, but China came to change it all after the  PBoC adjusted the reserve requirement on FX forwards trading to 20% effective August 6th, sending the pair from a 2-week low of 0.7347 back to its current comfort zone.   

China is the larger consumer of Australian mining-goods, the base of its economy, and therefore when China sneezes, the Aussie get a cold. The US said it's planning to increase tariffs from 10% to 25% in a proposed list of $200B on Chinese Goods, while China responded by menacing with tariffs of 5% to 25% on $60B on US goods. The backs and forths in trade war are making the commodity-linked currency unattractive for speculative interests and moves one way or the other are being quickly reverted on profit-taking.

The Australian economy sent mixed readings these last few days, as the trade balance posted a quite strong surplus of 1,873M, in June, while Retail Sales in the same month grew by more than anticipated. Business activity indexes, however, retreated strongly in July, with the AIG Performance of Manufacturing Index down to 52.0 from 57.4, and the Services one printing 53.6 from the previous 63.0.

In the meantime, the US Fed's announcement had little effect on the pair ahead or RBA decision next Tuesday. The Reserve Bank of Australia is expected to maintain its policy unchanged, also the wording of the accompanying statement, which has been far from hawkish ever since the year started.  Hopes, just hope ahead of the meetings from the previous month have kept the pair afloat. Given this past week's Fed's hawkish stance, it could be that sellers around the Aussie wait for the RBA to decide reflecting it in the price the central banks' imbalances.

Chinese macroeconomic calendar is plenty of big-tier events this upcoming week, and for sure those releases will take their toll on the AUD/USD pair. There are some chances that these figures can wake the pair out of its lethargy, but not betting much on it.

AUD/USD technical outlook

The AUD/USD pair has posted a lower low and a lower high for the week when compared to the previous one but remained in the 0.7300/0.7450 range coming from early June. In the weekly chart, the risk is leaned to the downside, as the 20 SMA continued moving lower, and below the larger ones, all of them above the current level. Technical indicators in the mentioned chart remain within negative levels without enough directional strength to indicate some sort of directional index, as the Momentum heads modestly higher, while the RSI is down at 36.

In the daily chart, the pair struggled all through the week with a directionless 20 DMA and well below the larger ones, while the Momentum is stuck around its 100 level and the RSI pivots also around its midline. As said on previous updates, one of the extremes of the mentioned range needs to give up for the market to make up its mind and trigger a sustainable continuation. In the meantime, buyers will likely appear on approaches to the 0.7330 region, while sellers will probably take their chances around 0.7440/50.

AUD/USD sentiment poll

The FXStreet Forecast Poll shows an increasingly bearish sentiment, with bears up to 86% weekly basis, from 47% last week. However, the average target is still within familiar levels, now at 0.7325 from the previous 0.7380. In the longer term perspectives, the number of those betting on further slides also increased but in there, the average targets also remain above the 0.7300 level. Uncertainty rules.  In the overview chart, the hiccups turn to the upside from last week has been reverted, and now the tree moving averages head south, although shorter term, seems almost neutral.