The AUDUSD started December on a high note after the impressive China PMI data and the hawkish RBA interest rate decision. The pair is trading at 0.7365, which is higher than the overnight low of 0.7338.
In its final interest rate decision of the year, the RBA did what most analysts were expecting. It left its policy tools unchanged. The main interest rate will stay at 0.1% while the bank will continue buying billions in government bonds to provide liquidity to the economy.
Also, it will continue with the yield-curve control that ensures that the three-year government bonds remain at 0.1%. Most importantly, it will continue with the term funding package that provides funding to companies through banks.
The AUDUSD also reacted to strong China manufacturing PMI data. The numbers from Markit showed that the PMI increased to 54.9 in November from the previous month’s 53.6. That was a better reading than the expected increase of 53.5.
Just yesterday, data from the Chinese government showed that the manufacturing sector was robust. This is a good thing for Australia, a leading provider of raw materials to the country.
AUDUSD technical outlook
Turning to the hourly chart, we see that the AUD/USD price has bounced back from the yesterday’s low of 0.7338. The price is now above the Woodie pivot point and slightly above the 25-day exponential moving average. It is also slightly below the ascending black trendline.
Therefore, in the short-term, I suspect that the pair will continue rising as bulls attempt to test the resistance at 0.7385. This price is at the intersection of the previous R2 of the Woodie pivot and the ascending trendline. However, a move below the lowest level yesterday will invalidate this trend.