AUD/USD challenges key trendline resistance as buyers search for a break higher
AUD/USD gains on the back of a more buoyant aussie, softer dollar
The high today reached 0.7038 as price closes in on a test of the key trendline resistance (point today seen at 0.7039) that has capped gains in the pair so far this year.
The other key level to watch out for today is the 100-day MA (red line) @ 0.7018. For buyers, staying above that will give added conviction to search for a move higher. However, the real test is that they must find a break above the key trendline resistance pointed out above to solidify the next leg to the upside.
Further resistance will then be seen at the 200-day MA (blue line) @ 0.7091. The 200-day MA is a rather substantial point of interest as price has not firmly traded or closed above that since March 2018.
For now, aussie gains mainly came after a bit of a relief that the labour market report earlier isn't going to spark the RBA to move and cut rates in August. But cash rate futures already had that view priced in around 81% beforehand and odds of that only jumped to roughly 86% currently. Hence, that's not a material change in my view.
The RBA statement in July had the subtle shift to adjust policy "if needed" and that already hinted that they are likely stay on hold until something tells them that they need to cut again. The report here mainly reaffirms that notion.
As such, any further gains in the pair is likely to be precipitated from dollar weakness more than aussie gains so let's see how things play out and what the technicals have to offer in the sessions ahead.