AUDUSD

AUDUSD Technicals Suggest a Move Down to 0.7065 is Possible

The AUDUSD pair is little changed during the Asian session as traders reflect on the strong manufacturing PMI data from the country. The pair is trading at 0.7141, which is a few pips below Friday’s high of 0.7226.

According to the Australian Industry Group, the country’s manufacturing index increased to 53.5 in July despite of the rising number of coronavirus cases in Melbourne and Victoria. In June, the index climbed to 51.5.

The AUDUSD pair also reacted to the strong increase in job advertisements in the country. This number grew by 16.7% in August, which is a reflection of the strength of the economy. In June, the advertisements expanded by 41.4%.

Meanwhile, upbeat data from China are also in play for the Australian dollar. According to Caixin and Markit, the manufacturing PMI expanded to 52.8 in July from the previous 51.2. On Friday, another PMI data from China Logistics showed that the PMI expanded to more than 53. This data is important for Australia because the country sells a third of its goods to China.

The AUDUSD is now waiting for the RBA interest rate decision that will come out tomorrow. Analysts believe that the bank will leave interest rates unchanged and continue with its yield curve control program.

AUDUSD technical outlook

The AUDUSD pair is trading at 0.7141. On the daily chart, this price is above the 50-day and 100-day exponential moving averages. Also, the price is above the ascending trend line that is shown in green below. This trendline connects the lowest levels in April, May, and July. Therefore, I suspect that the price is going to ease a bit due to dollar strength. If it does this, the next level to watch will be 0.7065, which is the highest level on June 10 and the lowest level on July 24.

On the flip side, a move above last Friday’s high of 0.7221 will invalidate this thesis. It will mean that there are more bulls in the market who will be keen to push the price higher.

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AUDUSD forecast

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