AUD/USD: Credible and firm uptrend heading into a busy week
|The AUD/USD pair is set to end the week on a solid footing above 0.7300, the highest levels since December 2018. The path of least resistance for the aussie appears to the upside, as observed in the daily chart, FXStreet’s Dhwani Mehta briefs. China PMIs, RBA meeting and US NFP will be eyed next week.
Key quotes
“The highlight of the week is expected to be the US Non-Farm Payrolls data, which will throw fresh light on the strength of the nascent US economic recovery. Earlier in the week, the Chinese Manufacturing PMIs could boost the persistent upbeat mood around AUD, as the factory activity in Australia’s top trading partner is expected to accelerate at a quicker pace in August.”
“The RBA is widely expected to leave its monetary policy settings unchanged after the resumption of bond-buying last month. The policymakers are likely to remain in a wait-and-see mode amid a slowdown in the virus cases and the recent appreciation in the exchange rate value.”
“The economic releases from the Australian docket is unlikely to be market moving and therefore, could have a limited impact on the local currency. Amid the Q2 business inventories, July private sector, and building approvals, the Q2 GDP estimate and July Retail Sales will garner some attention in the second half of the next week.”
“AUD/USD is poised to test the five-month-long rising wedge resistance at 0.7391 after this week’s bullish attempt. A daily closing above here is critical to test the August 2018 highs of 0.7454. The buyers will then find the motivation to take on the 0.7500 barriers.”
“On the flip side, a failure to take out the 0.7391 resistance, the spot could fall back towards the tough cushion at 0.7188, the convergence of the horizontal 21-DMA and pattern support. Acceptance below the latter will negate the bullish bias, calling for a test of the 50-DMA at 0.7077. The next downside target is seen at 0.7000, below which the bullish 100-DMA at 0.6838 will be put at risk.”
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