CFD Trading Rate Australian Dollar vs US Dollar (AUDUSD)

• AUD/USD stays in a tight range above 0.6700 despite multiple tailwinds.
• A hawkish guidance from RBA Bullock on interest rates fails to uplift the Australian Dollar (AUD).
• Weak US JOLTS Job Openings data weighs heavily on the US Dollar.

The AUD/USD pair trades in a tight range above the round-level support of 0.6700 in Thursday’s European session. The Aussie asset fails to find bids despite weakness in the US Dollar (USD) and Reserve Bank of Australia (RBA) Governor Michele Bullock’s hawkish guidance on interest rates.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, extends its downside below 101.20. The US Dollar faced selling pressure after the release of weak United States (US) JOLTS Job Openings data for July, which raised red flags to labor market conditions.

Michele Bullock said in his speech at the Anika Foundation in Thursday’s Asian session, "If the economy evolves broadly as anticipated, the board does not expect that it will be in a position to cut rates in the near term.” Her comments strengthened market speculation that the RBA will unlikely cut interest rates this year.

The Aussie asset consolidates as investors look for fresh cues about how much the Federal Reserve (Fed) will cut interest rates in its September meeting.

The Fed is widely anticipated to start reducing interest rates this month as downside risks to the United States (US) labor market have increased and the progress in the disinflation process towards bank’s target of 2% remains intact. For meaningful cues about the likely interest rate cut size, investors await the US Nonfarm Payrolls (NFP) data for August, which will be published on Friday.

In today’s session, investors will focus the US ADP Employment Change and ISM Services PMI for August. Economists estimate that payrolls in the private sector rose by 145K from 122K in July. In the same period, activities in the service sector, which accounts for two-thirds of the economy, are expected to have expanded at a slower pace to 51.1 from the former reading of 51.4.

• AUD/USD trades on a weaker note near 0.6720 in Thursday’s early Asian session. 
• The weaker US Job Openings data suggested continued cooling in the US job market, undermining the USD. 
• Traders will monitor the RBA’s Bullock speech ahead of US ISM Services PMI on Thursday. 

The AUD/USD pair softens around 0.6720 during the early Asian session on Thursday. The pair trades in a volatile session amid Chinese economic concern and the weaker US Dollar (USD). Traders will take more cues from the Reserve Bank of Australia's (RBA) Michele Bullock's speech ahead of the US ISM Services PMI, which is due later on Thursday. 

The weaker-than-expected US JOLT Job Openings for July signaled further cooling in the US labor market, triggering the expectation of a potential 50 basis points (bps) rate cut by the US Federal Reserve (Fed) in September. This, in turn, might weigh on the USD against the Australian Dollar (AUD). Traders will keep an eye on the US August Nonfarm Payrolls (NFP) for August on Friday.  Goldman Sachs analysts noted, “A market correction may start to get traction if payrolls are weak on Friday.”

On the Aussie front, Australia’s Gross Domestic Product (GDP) growth grew by just 0.2% in the April-June period and 1% over the last year, the Australian Bureau of Statistics reported on Wednesday. The report indicated that the Australian economy registered its worst performance in more than 30 years, excluding the first year of the COVID-19 pandemic.

Additionally, the fear of a Chinese economic slowdown might contribute to the AUD’s downside as China is a major trading partner to Australia. Chinese Caixin Manufacturing PMI rose to 50.4 in August from 49.8 in July, below the estimation of 52.2. 

Traders await the RBA’s Bullock speech on Thursday for more insight about the economic and interest rate outlook. Any hawkish comments from Bullock could lift the Aussie and cap the pair’s downside. 

The Australian Dollar’s (AUD) double-top bearish reversal gets underway, OCBC FX strategists Frances Cheung and Christopher Wong note.

Further downside towards 0.6640 is possible

“Pair was last at 0.6715 levels. Bullish momentum on daily chart faded while RSI fell. Recent pullback may have found an interim support at 0.67 (21 DMA). Decisive break may open room for further downside towards 0.6640. Resistance at 0.6730, 0.6790.”

“2Q GDP released this morning was largely in line with estimates while services PMI held up. With domestic data out of the way. AUD should revert to taking cues from equity sentiments and USD moves in the coming sessions.”

• AUD/USD rebounds as the US Dollar corrects with US NFP data taking centre stage.
• US employers are expected to have posted fresh 8.1 million job vacancies in July.
• The Aussie economy expanded at an expected pace of 1% on an annualized basis.

The AUD/USD pair bounces back and recovers its intraday losses after posting a fresh two-week low slightly below the crucial support of 0.6700 in Wednesday’s European session. The Aussie asset rebounds as the US Dollar (USD) corrects moderately after posting a fresh two-week high. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls from recent highs of 102.00 to near 101.60.

Market sentiment remains risk-averse as investors are cautious ahead of the United States (US) Nonfarm Payrolls (NFP) data for August, which will be published on Friday. S&P 500 futures extend its Tuesday’s downside further, exhibiting a decline in investors’ risk-appetite.

Investors keenly await the US labor market data as it will shape the Federal Reserve’s (Fed) interest rate cut path for the September meeting. The significance of the labor market has increased as the commentary from Fed Chair Jerome Powell at the Jackson Hole (JH) Symposium signalled that the central bank is focused on preventing job losses, given that price pressures are on track to return sustainably to bank’s target of 2%.

Before that, the US Dollar will be guided by the JOLTS Job Openings data for July, which will be published at 14:00 GMT. Economists expect that US employers posted 8.1 million fresh job vacancies, marginally lower from 8.184 million in June.

On the Aussie front, the Australian Dollar (AUD) recovers losses driven by mixed Q2 Gross Domestic Product (GDP) data. The report showed that the economy expanded steadily by 0.2%, slower than estimate of 0.3%. Annualized GDP grew in line with expectations of 1%, slower than the former reading of 1.3%, upwardly revised from 1.1%.

Going forward, investors will focus on the Reserve Bank of Australia (RBA) Governor Michele Bullock’s speech on Thursday. Investors will look for fresh cues about whether the RBA will pivot to policy normalization this year.

• AUD/USD trades with mild gains around 0.6715 in Wednesday’s early Asian session. 
• Australian Services PMI rose to 52.5 in August vs. 52.2 prior, better than estimated. 
• Traders raised their bets on a more aggressive rate cut after the weaker US Manufacturing PMI data. 

The AUD/USD pair gains traction near 0.6715 during the early Asian session on Wednesday. The upbeat Australian August Purchasing Managers Index (PMI) provides some support to the Australian Dollar (AUD). However, traders will take more cues from Australia’s Gross Domestic Product (GDP) for the second quarter, which is due Wednesday.

Data released by the Judo Bank and S&P Global on Wednesday showed that the country’s Services PMI came in stronger than expected, rising to 52.5 in August from 52.2 in July. Meanwhile, the Composite PMI improved to 51.7 in August, better than the estimation and the previous reading of 51.4.

Investors will closely watch the Australian GDP growth number, which is expected to grow 0.3% QoQ in the second quarter (Q2) of the year and 1% in the twelve months to June. The stronger-than-estimated GDP could boost the Aussie, while the weaker reading could trigger speculation the Reserve Bank of Australia (RBA) to cut interest rates and might weigh on the AUD.

The US ISM Manufacturing PMI registered the lowest reading since November. The figure rose to 47.2 in August from 46.8 in July, but below the market consensus of 47.5. The weaker reading raised the probability the Federal Reserve (Fed) will cut the interest rate by at least a quarter percentage point later this month. 

Traders raised the chance of a more aggressive half-point reduction to 39%, up from 31% before the US ISM Manufacturing PMI report, according to the CME Group’s FedWatch measure. The US ISM Services PMI will be released on Thursday, which is projected to ease to 51.4 in August from 51.1 in July. On Friday, the attention will shift to the US Nonfarm Payrolls (NFP) report for August. 

The Australian Dollar (AUD) was a touch softer this morning after net exports came in softer, current account deficit widened, OCBC FX strategists Frances Cheung and Christopher Wong note.

AUD set to break below 0.6730

“This added to suspicion that 2Q GDP print tomorrow (930am SGT release) may be skewed to the downside. Meanwhile further decline in iron ore futures to 20- month low further undermined AUD.”

“Pair was last at 0.6732 levels. Bullish momentum on daily chart is fading while RSI fell. Corrective pullback is underway. Support at 0.6730, 0.6660. Resistance at 0.6830, 0.6870. Focus this week on 2Q GDP (Wed). A softer print should see AUD come under pressure.

• AUD/USD falls vertically below 0.6750 amid risk-off mood.
• The US Dollar gains ahead of the US ISM Manufacturing PMI for August.
• The Australian Dollar will be guided by RBA Bullock’s speech on Thursday.

The AUD/USD pair plunges below the crucial support of 0.6750 in Tuesday’s European session. The Aussie asset has been hit hard as the US Dollar (USD) extends its upside ahead of a slew of United States (US) economic data this week.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, inches closer to a two-week high of 102.00. Meanwhile, the market sentiment remains risk-averse as speculation for the Federal Reserve (Fed) to start reducing interest rates this month aggressively has eased. S&P 500 futures have posted significant losses in European trading hours.

Traders see a little chance that the Fed will cut interest rates by 50 basis points (bps) this month as the revised estimate for the United States (US) Q2 Gross Domestic Product (GDP) growth showed that the economy at a faster pace of 3% than flash estimates of 2.8% on an annualized basis.

For fresh cues on the Fed interest rate cut path, investors await the US Nonfarm Payrolls (NFP) data for August, which will be published on Friday. In Tuesday’s session, investors will focus on the US ISM Manufacturing PMI for August, which will be published at 14:00 GMT. Activities in the manufacturing sector are expected to have contracted at a slower pace, with the PMI coming in at 47.5 from July’s reading of 46.8.

Meanwhile, the Australian Dollar (AUD) weakens as the current market mood bodes poorly for risky assets. On the domestic front, the major trigger for the Aussie will be the Q2 GDP data, which will be published on Wednesday. The Australian economy is estimated to have expanded at a faster pace of 0.3% than 0.1% growth registered in the January-March period.

This week, investors will also focus on Reserve Bank of Australia (RBA) Governor Michele Bullock’s speech on Thursday. Investors will look for fresh cues about whether the RBA will pivot to policy normalization this year.

• AUD/USD is at a critical level for the uptrend. 
• Whilst a recovery is possible, more downside could also signal a reversal. 
• The pair has reached the top of a range at a similar level to where it rotated in July. 

AUD/USD has been in an uptrend all through August. It reached a new peak of 0.6824 on August 29 and then pulled back. 

The correction so far is a three wave structure, perhaps an ABC correction, suggesting it is just a counter-trend reaction and the uptrend will probably resume. 

If AUD/USD can close back above 0.6800 it will signal a continuation of the uptrend back up to the 0.6824 high first, then possibly higher. 

AUD/USD 4-hour Chart

An extension lower, however, would bring into question this hypothesis and possibly suggest the correction might actually be the start of a new downtrend. 

For confirmation price would need to close below 0.6751, (low of August 30). That would likely be followed by a move down to 0.6700-05 and the 200-period Simple Moving Average (SMA). 

AUD/USD is a broad sideways range and it has retested resistance at the top of the range like it did in July. This could be another indication the short-term trend may be about to change and price could start declining again.  

The Relative Strength Index (RSI) momentum indicator is in the lower half of its range. It is showing quite strong bearish momentum accompanied the pull back from the August 29 high. 

The Australian Dollar (AUD) fell on growth concerns in China (weaker NBS PMI seen over the weekend), softer iron ore prices while USD broadly rebounded, OCBC’s FX analyst Christopher Wong notes.

AUD may suffer a corrective pullback in the near term

The move lower remains in line with our technical caution for the pullback lower. Pair was last at 0.6783 levels. Bullish momentum on daily chart is fading while RSI eased from near overbought conditions. We remain cautious of a corrective pullback in the near term.

Support at 0.6730, 0.6660. Resistance at 0.6830, 0.6870. Data focus this week on 2Q GDP (Wed). A softer print may see AUD come under pressure.

• AUD/USD trades stronger around 0.6770 in Monday’s early Asian session.
• The US Fed's closely watched inflation measure rose 2.5% YoY in July. 
• China's NBS Manufacturing PMI declined to 49.1 in August; Non-Manufacturing PMI rose to 50.3 in the same period. 
• Chinese August Caixin Manufacturing PMI will be released on Monday, which is expected to improve to 50.0 vs. 49.8 prior. 

The AUD/USD pair posts modest gains near 0.6770 after retreating from Friday’s high of 0.6815 during the early Asian session on Monday. However, the firmer US dollar after the US July's Personal Consumption Expenditures (PCE) Index might drag AUD/USD lower. The release of US Nonfarm Payrolls (NFP) for August on Friday will be in the spotlight and might offer some hints about the size and pace of US interest rate reduction by the US Federal Reserve (Fed). 

Data released by the US Bureau of Economic Analysis on Friday showed that the US headline Personal Consumption Expenditures (PCE) Price Index rose 2.5% YoY in July, compared to the previous reading of 2.5%, softer than the estimation of 2.6%. The core PCE, which strips out volatile food and energy prices, climbed  2.6% YoY in July versus 2.6% prior, below the consensus of 2.7%. 

The PCE reading may not have been dovish enough to convince the Fed to start with a 50 basis points (bps) cut, lifting the Greenback. The report comes with the market's pricing in nearly a 70% probability of the Fed cutting rates by 25 bps in September, while the chance of the Fed cutting rates by 50 bps is 30%, according to the CME FedWatch Tools. 

On the other hand, the monetary policy divergence between the dovish Fed and the hawkish Reserve Bank of Australia (RBA) might limit the pair's downside in the near term. The RBA deputy governor Andrew Hauser stated on Friday that the Australian central bank will not follow the Fed and cut interest rates this year as inflation remains high and the 4.35% cash rate is not very high by global standards. 

Elsewhere, the Chinese NBS Purchasing Managers' Index (PMI) was mixed in August. The country’s Manufacturing PMI declined to 49.1 in August, compared to 49.54 in the previous reading, missing the market expectation of 49.5. Meanwhile, Non-Manufacturing PMI improved to 50.3 in August versus 50.2 prior, above the 50.0 estimated. 

Investors will shift their attention to the Chinese Caixin Manufacturing PMI for August, which is due on Monday. The weaker-than-expected outcome could drag the China-proxy Australian Dollar (AUD) lower as China is a major trading partner to Australia. 

The Australian Dollar (AUD) is expected to trade in a range, probably between 0.6775 and 0.6820. In the longer run, there has been no further increase in momentum; if AUD breaks below 0.6730, it would mean that 0.6870 is not coming into view, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann notes.

Moves up towards 0.6820

24-HOUR VIEW: “Our view of AUD consolidating in a range of 0.6760/0.6810 yesterday was incorrect. Instead of consolidating, AUD rose to 0.6824, pulling back to close at 0.6798 (+0.20%). The advance did not result in a significant increase in momentum. Today, we expect AUD to trade in a range, probably between 0.6775 and 0.6820.”

1-3 WEEKS VIEW: “There is not much to add to our update from yesterday (29 Aug, spot at 0.6780). As highlighted, the price action over the past couple of days did not result in further increase in momentum. From here, if AUD breaks below 0.6730 (no change in ‘strong support’ level), it would mean that the major resistance at 0.6870 is not coming into view.”

• AUD/USD moves higher to near 0.6800 despite flat Aussie Retail Sales data for July.
• The RBA is unlikely to pivot to policy normalization this year.
• Investors await the US core PCE inflation for July and Caixin Manufacturing PMI for August.

The AUD/USD pair gains to near 0.6800 in Friday’s European session. The Aussie asset rises as the Australian Dollar (AUD) remains firm even though the Australian Retail Sales were reported flat in July in Asian trading hours, and China’s Manufacturing PMI is expected to have contracted consecutively for the second month in August.

The Australian Bureau of Statistics reported on early Friday that there was no growth in Retail Sales in July, while economists forecasted them to rise at a slower pace of 0.3% from 0.5% in June. Flat Retail Sales appear to be the outcome of the lower spending power of households due to high inflation and the restrictive monetary policy stance of the Reserve Bank of Australia (RBA).

Despite a slowdown in Australian consumer spending, the RBA is unlikely to cut interest rates sooner as its battle against inflation appears to be much more fierce than what other nations are facing. Recent inflation data showed that the monthly Consumer Price Index (CPI) decelerated to 3.5% from 3.8% in June but remained higher than estimates of 3.4%. According to the market speculation, the RBA is expected to keep its Official Cash Rate (OCR) at 4.35% by the year.

Meanwhile, a Reuters poll showed on Friday that China’s factory PMI, which will be published on Monday, is expected to come in below 50.0. A level that separates growth mark from contraction. This would prompt the scale of monetary stimulus to uplift poor economic prospects. Being a proxy for China’s economic prospects, the Australian Dollar will be negatively influenced by weak data.

On the Unites States (US) front, investors await the Personal Consumption Expenditure Price Index (PCE) data for July, which will be published at 12:30 GMT. The report is expected to show that the annual core PCE inflation, which excludes volatile food and energy prices, rose at a higher pace of 2.7% from June’s reading of 2.6%, with monthly figures growing steadily by 0.2%. The inflation data will significantly influence market speculation for Fed interest rate cuts in September.

The Fed is widely anticipated to start reducing its borrowing rates in September but traders are divide over the likely rate-cut size.

• AUD/USD continues rising to new highs.
• The RSI has stopped its bearish divergence with price. 

​​​​​​​AUD/USD posts higher highs as it extends its rally and continues the uptrend it began at the start of August. 

The pair has now broken above the previous monthly high of 0.6813 it reached on Wednesday. After a short pull back it resumed its uptrend and has broken to new highs. Given “the trend is your friend” is expected to continue rising.

AUD/USD 4-hour Chart

Now that AUD/USD has broken above the previous highs, it sets its sights on the next target at 0.6870, the December 2023 high. 

The Relative Strength Index (RSI) momentum indicator has stopped showing bearish divergence with price since surpassing Wednesday’s high. This is a supportive sign for the bullish trend. 

Any corrections of the trend would be expected to find support either at Wednesday’s 0.6813 high or 0.6755 if deeper.

The Australian Dollar (AUD) is expected to consolidate in a range of 0.6760/0.6810. In the longer run, there has been no further increase in momentum; if AUD breaks below 0.6730, it would mean that 0.6870 is not coming into view, UOB Group analysts Quek Ser Leang and Lee Sue Ann note.

AUD can rise after a sustained breach of 0.6810

24-HOUR VIEW: “Yesterday, we detected ‘a slight increase in upward momentum.’ We indicated that ‘there is scope for AUD to edge higher, but any advance is likely limited to a test of 0.6815.’ Our view was not wrong, as AUD rose to 0.6813, pulling back to close at 0.6785 (-0.13%). AUD has likely entered a consolidation phase. Today, we expect AUD to trade in a range of 0.6760/0.6810.”

1-3 WEEKS VIEW: “Our most recent narrative was from Monday (26 Aug, spot at 0.6790), wherein ‘while the outsized advance from last Friday suggests further AUD strength, given the overbought conditions, it remains to be seen if 0.6870 is within reach in the next 1 to 2 weeks.’ Yesterday, AUD rose to 0.6813, then pulled back. There has been no further increase in momentum, and if AUD breaks below 0.6730 (no change in ‘strong support’ level) it would mean that 0.6870 is not coming into view.”

• AUD/USD strengthens near 0.6790 in Thursday’s early Asian session. 
• Australia’s private capital spending dropped by 2.2% in Q2 vs. 1.0% prior, weaker than expected. 
• The second estimate of US Q2 GDP growth numbers will be in the spotlight on Thursday. 

The AUD/USD pair trades on a stronger note around 0.6790 on Thursday during the Asian trading hours. The hotter-than-expected Australian CPI inflation data push back the expectation of a rate cut by the Reserve Bank of Australia (RBA) and provide some support to the Aussie. 

Australia’s private capital spending dropped by 2.2% in the second quarter (Q2) from an increase of 1.0% in the previous quarter, the Australian Bureau of Statistics showed Thursday. This figure was below the estimation of 1.0%. Meanwhile, spending on buildings and structures slid by 3.8%, while plant and machinery declined by 0.5%. 

The Australian inflation data on Wednesday appeared insufficient to trigger the Reserve Bank of Australia (RBA) rate cut expectations, which has lifted the Aussie against the USD. The country’s monthly CPI inflation eased to 3.5% from 3.8% in June, but higher than expectations of 3.5%. Investors will take more cues from the Australian Retail Sales, which are due on Friday. 

The US Federal Reserve (Fed) signaled that lower interest rates are finally on the horizon, which weighs on the USD broadly. Fed Chair Jerome Powell said at Jackson Hole last week that “the time has come for policy to adjust.” However, the weakness in the job market is also playing a role in nudging the Fed to ease borrowing costs. The US Nonfarm Payrolls for August next week will be closely watched. Later on Thursday, traders will focus on the US GDP growth numbers for the second quarter in the second estimate, which is forecast to expand by 2.8%. 

• AUD/USD continues rising in line with the dominant uptrend. 
• The RSI is showing bearish divergence with price, however, warning of a possible pull back.
   

AUD/USD extends its rally and makes higher highs as it continues the uptrend it began at the start of August. 

The pair reached a new monthly high of 0.6813 on Wednesday. Although it has pulled back since, it remains in an established uptrend which, given “the trend is your friend” is expected to extend.

AUD/USD 4-hour Chart

AUD/USD has broken above the key 0.6799 July 11 high, and now sets its sights on the next target at 0.6870, the December 2023 high. A break above 0.6813 would provide bullish confirmation. 

The Relative Strength Index (RSI) momentum indicator is showing bearish divergence with price. The new monthly high price reached on Wednesday was not accompanied by a corresponding new high in the RSI, for example. This shows waning momentum which is a bearish sign and could infer a deeper correction is on the horizon. 

The price levels at 0.6755 and 0.6639, however, would be expected to provide support to any pull backs and points of departure for fresh upswings as the dominant uptrend is likely to resume.

• AUD/USD grips gains near 0.6800 as hotter-than-expected Aussie inflation keeps hopes of RBA leaving interest rates steady this year alive.
• Aussie monthly CPI rose by 3.5%, remained higher than estimates of 3.4% but decelerated from the prior release of 3.8%.
• Investors await the Aussie Retail Sales and US core PCE inflation data for July.

The AUD/USD pair holds onto gains near the round-level figure of 0.6800 in Wednesday’s European session. The Aussie asset posts a fresh seven-month high of 0.6813 after a hotter-than-expected Australian monthly Consumer Price Index (CPI) for July kept market speculation for the Reserve Bank of Australia (RBA) to leave its Official Cash Rate (OCR) steady at 4.35% for the entire year alive.

The inflation date came in the early Asian session on Wednesday and showed that monthly CPI decelerated to 3.5% from 3.8% in June but remained higher than expectations of 3.5%, which appeared insufficient to bring RBA rate cut expectations on the table.

This week, the Australian Dollar (AUD) is expected to show more action as Aussie monthly Retail Sales data for July is lined up for release on Friday. Economists estimate that Retail Sales, a key measure of consumer spending that prompts price pressures, to have grown at a slower pace of 0.3% from 0.5% in June.

Meanwhile, the US Dollar (USD) regains temporary ground after posting a fresh year-to-date (YTD) low. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, delivers a mild recovery from 100.50 to near 100.85.

Investors see the US Dollar’s recovery as a short-lived pullback, with evidence that its near-term outlook is uncertain. The Greenback has remained under pressure as the Federal Reserve (Fed) seems to be prepared to start reducing interest rates from the September meeting, with uncertainty over the likely size by which the central bank will cut its key borrowing rates.

For fresh cues on interest rate cut path, investors await the United States (US) core Personal Consumption Expenditure Inflation (PCE) data for July, which will be published on Friday. The PCE Price Index report is expected to show that the annual core inflation rose by 2.7%, faster than June’s reading of 2.6%, with monthly figures growing steadily by 0.2%.

Scope for Australian Dollar (AUD) to edge higher, but any advance is likely limited to a test of 0.6815. In the longer run, outsized advance suggests further AUD strength; given the overbought conditions, it remains to be seen if 0.6870 is within reach, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

The 0.6870 resistance may be out of reach

24-HOUR VIEW: “AUD traded between 0.6762 and 0.6796 yesterday, higher than our expected sideways trading range of 0.6750/0.6790. The price action has resulted in a slight increase in upward momentum. Today, there is scope for AUD to edge higher, but any advance is likely limited to a test of 0.6815. The major resistance at 0.6870 is unlikely to come under threat. On the downside, a breach of 0.6760 (minor support is at 0.6775) would indicate that the current mild upward pressure has eased.”

1-3 WEEKS VIEW: “Our update from Monday (26 Aug, spot at 0.6790) is still valid. As indicated, while the outsized advance from last Friday suggests further AUD strength, given the overbought conditions, it remains to be seen if 0.6870 is within reach in the next 1 to 2 weeks. On the downside, if AUD breaks the ‘strong support’ at 0.6730 (level previously at 0.6710), it would suggest that it is not strengthening further.”

• AUD/USD renews seven-month highs above 0.6800 after Australian CPI cools less than expected.
• The US Dollar recovers as risk sentiment deteriorates ahead of Fedspeak and Nvidia earnings report.
• AUD/USD daily technical setup points to more gains in the offing in the near term.

AUD/USD is paring back gains to trade near 0.6800 in Asian trading on Wednesday, having reversed a spike to a new seven-month high of 0.6813.

AUD/USD cheers Australian CPI data 

The Aussie pair caught a fresh bid wave and recaptured the 0.6800 barrier following the Australian monthly Consumer Price Index (CPI) data release.

The inflation data showed that consumer prices in Australia cooled at a slower pace than expected in July, reporting a 3.5% YoY growth when compared to a 3.4% increase estimated and June’s 3.8% acceleration.

Hot Australian inflation data re-kindled expectations of further interest-rate hikes from the Reserve Bank of Australia (RBA), fuelling a fresh leg up in the Aussie Dollar (AUD).

However, a risk-averse market environment limited the upside in the higher-yielding Aussie while lifting the haven demand for the US Dollar (USD).

Markets are anxious heading into the much-awaited US AI giant’s, Nvidia. Earning reports, leading to a decline in the global stocks. Traders also await a slew of speeches from the US Federal Reserve (Fed) official for fresh cues on the magnitude of the upcoming rate cut in September.

Looking ahead, the pair will remain at the mercy of the Fedspeak-driven USD price action and the broader market sentiment, gearing up for Thursday’s Australian Private Capex data for the second quarter.

Technically, AUD/USD remains poised for more upside, as the 14-day Relative Strength Index (RSI) points north above the 50 level while just beneath the overbought region, currently near 67. Further, a couple of bullish crossovers on the daily time frame also add credence to the constructive outlook for the Aussie.

AUD/USD: Daily chart