AUD/USD closes Thursday above 0.6850 amid USD weakness

AUD/USD closed Thursday near 0.6890, recording a 1.47% gain.
The Aussie held gains despite weak Import and Exports Chinese data reported during the Asian session.
USD faced severe selling pressure following soft PPI figures.

Patricio Martín FXStreet

On Thursday, the AUD/USD tallied a fifth consecutive day of gains and closed near the 0.6890 zone. The broad USD weakness amid dovish bets on the Federal Reserve (Fed) following soft inflation figures allowed the Aussie to gain ground despite weak Trade Balance figures reported from China early in the Asian session.

The Producer Price Index (PPI) from the US from June came in at 0.1% lower than expected at 0.2%, and the Core Figure was 2.4% lower than expected at 2.6%. As a reaction, US Treasury bond yields saw sharp declines across the board, with the 2, 5 and 10-year yields retreating to 4.63%, 3.94% and 3.76%, respectively.

Even though a 25 basis point rate hike is expected at the next FOMC (Federal Open Market Committee) meeting on July 25-26, what is driving the Dollar lower is the belief that it will be the last hike. It's worth noting that several officials deemed “additional” increases necessary but the recent inflation from the US figures released on Wednesday and Thursday made markets refrain from betting on an additional hike past July.

AUD/USD Levels to watch

The daily chart suggests that the pair’s outlook for the short term is bullish. Indicators hold strong in positive territory, with the Relative Strength Index (RSI) nearing overbought conditions and the Moving Average Convergence Divergence (MACD) printing rising green bars, indicating that the bulls have the upper hand.

Resistance Levels: 0.6900 (June's high), 0.6950,0.6980.
Support Levels: 0.6785, 0.6750, 0.6715 (20-day Simple Moving Average).

AUD/USD

Overview
Today last price	0.6885
Today Daily Change	0.0099
Today Daily Change %	1.46
Today daily open	0.6786

Trends
Daily SMA20	0.6718
Daily SMA50	0.6681
Daily SMA100	0.6683
Daily SMA200	0.6701

Levels
Previous Daily High	0.6796
Previous Daily Low	0.6682
Previous Weekly High	0.6705
Previous Weekly Low	0.6599
Previous Monthly High	0.69
Previous Monthly Low	0.6484
Daily Fibonacci 38.2%	0.6753
Daily Fibonacci 61.8%	0.6726
Daily Pivot Point S1	0.6713
Daily Pivot Point S2	0.6641
Daily Pivot Point S3	0.6599
Daily Pivot Point R1	0.6827
Daily Pivot Point R2	0.6869
Daily Pivot Point R3	0.6941

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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