Aussie Is About to Jump Above Its 3-Month High at 0.7835 Ahead of RBA Minutes

The AUD/USD had an impressive rally on Friday, adding more than 1.30% at its value on the back of the weak U.S. dollar. The Fed Chair Janet Yellen’s comments during her two-day semiannual testimony “forced” the traders to turn to emerging markets and commodity currencies for their portfolios. The Australian consumer inflation expectation, released last week by the Melbourne Institute, showed a robust increase to 4.4% in July, from 3.6% before. On the other hand, U.S. retail sales contracted by 0.2% in June versus an increase of 0.2% expected, and U.S. headline inflation rate slipped to 1.6% in June against the 1.9% the prior month.

Early in the morning today, China’s economic data failed to impact the Aussie as it usually does, since China is the biggest trading partner of Australia. The Chinese economy expanded by 6.9% the second quarter of 2017 compared to the corresponding quarter the year before, above the forecast of 6.8%. Moreover, industrial production jumped 7.6% against predictions of 6.5%. At 01:30 GMT tomorrow morning, the Reserve Bank of Australia will release the minutes of their last policy meeting. On Wednesday, late in the Asian session, Australian Statistician will publish June’s employment report.

AUD/USD Strong Buying Interest – New 3-Month High at 0.7835

The Australian Dollar is moving sharply higher against the U.S. dollar over the last trading periods as it surged almost 3% since last week. The AUD/USD pair printed seven green consecutive days following the rebound on the 0.7570 support barrier and broke the ascending triangle on the weekly chart to the upside. The triangle was holding since January and now we are expecting an aggressive buying interest. Also, the commodity currency pair posted a new three month high at 0.7835. The next level to have in mind is the 200-weekly SMA which is near with the 0.8010 price level if the price jumps above 0.7835.

On the daily chart, the technical indicators are confirming the recent bullish attitude as both are developing in overbought areas. The RSI indicator climbed above the 70 level and now is sloping to the upside. The MACD oscillator has strong momentum and is moving higher from the trigger and zero lines. Furthermore, the 50-SMA created a bullish crossover with the 100 and 200 SMAs which is indicating a buy signal for the traders.

Analysis by JFD Research