Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
AUD/USD Hits Post-Wedge Target. Bulls Eye Higher Ground Ahead of Central Bank Decision

AUD/USD Hits Post-Wedge Target. Bulls Eye Higher Ground Ahead of Central Bank Decision

Thomas Westwater, Analyst

Australian Dollar, AUD/USD, RBA, China, Technical Forecast - TALKING POINTS

  • Australian Dollar rises despite weak US session, falling iron ore prices
  • RBA rate decision and US House Speakers visit to Taiwan present risks
  • AUD/USD prices at its post-wedge target as oscillators remain healthy

Tuesday’s Asia-Pacific Outlook

The Australian Dollar is tracking higher versus a broadly weaker US Dollar ahead of today’s rate decision from the Reserve Bank of Australia. US stocks closed slightly lower overnight, with the benchmark S&P 500 falling by 0.28%. Bond yields rose as traders sold Treasuries, putting pressure on equity valuations. The ISM PMI survey for July beat expectations, crossing the wires at 52.8 versus an expected 52.0 but still the lowest reading since June 2020.

Geopolitical tensions are afoot with US House Speaker Nancy Pelosi heading to Taiwan. Ms. Pelosi’s visit is drawing fierce condemnation from Chinese political leaders. China has warned of consequences of the visit, with some speculating that China’s military may fly aircraft over the island during the visit. That would likely elicit a risk-off market response.

China’s central bank, the People’s Bank of China (PBOC), released a statement affirming its support for the country’s ailing property sector. The PBOC vowed to provide ample support and liquidity. The move follows a series of mortgage boycotts across the country and the weakest property sector lending on record for June. Iron ore prices rose above $120 in China but have since fallen to around $117. A continued drop may drag on the Aussie Dollar.

Today, South Korea’s inflation rate is seen crossing the wires at 6.3%, which would be up from June’s 6% y/y print. The Philippines’ retail price index for May and Australia’s home loans for June are also due out. Japan will hold a 10-year Japanese Government Bond (JGB) auction at 03:35 GMT. The RBA rate decision is expected at 04:30 GMT.

AUD/USD Technical Outlook

AUD/USD rose over 0.5% overnight, bouncing from its 50-day Simple Moving Average. The cross is now at its post-wedge target of 0.7036, with oscillators showing still healthy momentum. If bulls continue to press prices higher, the 100-day SMA could present a tangible target. Alternatively, a pullback would look for support around the 50-day SMA.

AUD/USD Daily Chart

aud chart

Chart created with TradingView

--- Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES