Currently, AUD/USD is trading at 0.7902, up +0.10% on the day, having posted a daily high at 0.7903 and low at 0.7887.
AUD/USD has popped higher but is expected to consolidate in the high 0.78s by analysts at Westpac who also suggest that if the RBA remains firmly on hold and the US dollar rises on tighter Fed policy, then AUD/USD could fall to 0.76 by year end.
However, we have Chinese retails sales and IP today and the RBA minutes tomorrow. We also had a disappointment last week in the US CPI that helped push the US dollar lower. " US 10yr treasury yields fluctuated between 2.18% and 2.22% following the CPI data, but ended the session near the low. 2yr yields fell from 1.34% to 1.29%. Fed fund futures yields fell, pricing the chance of a December rate hike at around 35% (from 42%)," explained the analysts at Westpac.
All in all, the dollar may struggle to remain elevated in the absence of positive data at the fore for the week. We will have to wait for US retails sales and indeed the FOMC minutes and reassess the dollar's position. However, the 0.80 handle is a big psychological level for the Aussie and bulls could be hard pressed achieving ground through there immediately.
Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the latest advance was contained by a daily descendant trend line coming from August 1st high, while the price settled a few pips above a bearish 20 SMA. "Technical indicators are stuck within neutral territory. The immediate resistance comes at 0.7925, the level to surpass to take off the bearish pressure, and favor some additional gains, at least short term," argued Bednarik.
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