The AUDUSD pair rose slightly in early trading, mostly because of the overall weaker US dollar. The pair rose even as the number of coronavirus cases in Australia continued to rise, putting the previous week’s recovery at risk. The pair is trading at 0.7164, which is slightly below last week’s high of 0.7244.
The number of coronavirus cases in Australia continued to rise. In Victoria, health officials confirmed 19 deaths, pushing the total to 314. That marked the deadliest day of the coronavirus pandemic. Victoria confirmed 322 new cases on Monday.
The AUDUSD pair is also reacting, albeit mildly, to the Chinese inflation data. According to the National Bureau of Statistics, the country’s headline consumer price index rose by 2.7% in July after rising by 2.5% in the previous month.
Analysts were expecting the CPI to climb to 2.6%. On a month over month basis, the CPI rose by 0.6% after falling by 0.6% in the previous month. The increase in inflation was mostly due to a 80% increase in pork prices.
Meanwhile, the producer price index declined by 2.4% in July after falling by 3.0% in the previous month.
AUDUSD outlook
The AUDUSD pair is trading at 0.7164. On the daily chart, the price is slightly above the 50-day and 100-day exponential moving averages. The price is also along an upward trend, as evidenced by the ascending trend line shown in blue below. Therefore, I suspect that the pair will remain in this upward trend as investors aim for the upper side of the channel at 0.7250.
On the flip side, a move below 0.7075 will invalidate this trend. This price is along the lowest level on August 3. If it does this, it will send a signal that there are more bears in the market, who will be keen to push the price below 0.7000.
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AUDUSD technical forecast
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