AUD / USD is expected to end the week on a solid basis above 0.7300, the highest level since December 2018. The path of least resistance for the Aussie appears to be up, as seen in the daily chart, sums up Dhwani Mehta of FXStreet. Chinese PMIs, RBA meeting and US NFP will be observed next week.
“The highlight of the week is expected to be non-farm payroll data in the United States, which will shed new light on the strength of the nascent US economic recovery. Earlier in the week, Chinese manufacturing PMIs could boost the lingering optimistic mood around the AUD as factory activity in Australia’s main trading partner is expected to pick up faster in August.
“The RBA is expected to leave its monetary policy parameters unchanged after the resumption of bond buying last month. Policymakers are expected to remain in a wait-and-see mode amid slowing virus cases and the recent appreciation in the value of the exchange rate. “
“The Australian Registry’s economic publications are unlikely to move the market and therefore could have a limited impact on the local currency. Amidst Q2 corporate inventories, July private sector and building approvals, the Q2 GDP estimate and July retail sales will gain some attention in the second half of next week.
AUD / USD is set to test the bullish resistance at 0.7391 for five months after this week’s bullish attempt. A daily close above is essential for testing the August 2018 highs of 0.7454. Buyers will then find the motivation to face the 0.7500 barriers. “
“On the other hand, failing to break resistance at 0.7391, the spot could fall back to the hard cushion at 0.7188, the convergence of horizontal 21-DMA and pattern support. Acceptance below the latter will negate the bullish bias, calling for a test of 50-DMA at 0.7077. The next bearish target is at 0.7000, below which the bullish 100-DMA at 0.6838 will be endangered. ”