AUD/USD analysis: pressuring highs on relief rally

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7436

De-escalating trade war fears sent stocks higher, backing Aussie's gains.
Australian inflation remained subdued in Q2, anticipating an on-hold RBA for longer.

The AUD/USD pair surged in the US afternoon, as local stocks changed course, reversing early losses and soaring to fresh highs on the back of hopes that the US and the EU will reach some sort of agreement to prevent trade tensions between both economies. The pair, however, stalled below its early daily high of 0.7449, achieved at the beginning of the day, following an uptick in Australian inflation. Australian quarterly CPI released at the beginning of the day was slightly below the market's expectations, as Q2 inflation resulted at 2.1% YoY vs. the expected 2.2%, but above the previous 1.9%. The core measure came in as expected at 1.9%, unchanged from Q1. Such numbers should keep the current RBA on-hold stance in place for longer. Australia will release during the upcoming Asian session its Q2 Import and Export prices indexes, hardly market movers. The pair is trading close, but below the key 0.7440/50 resistance area, gaining upward traction and biased higher according to technical readings in the 4 hours chart, as it is currently above its 100 and 200 SMA, while technical indicators accelerate their advances within positive territory, nearing their weekly highs. A steeper advance could be expected on a break above 0.7483, the highest for this July.

Support levels: 0.7400 0.7370 0.7330

Resistance levels: 0.7445 0.7490 0.7520

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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