The pair will likely maintain the bullish trend, with the next key resistance being at 0.7350.
Set a buy-stop at 0.7271 and a take-profit at 0.7350.
Add a stop-loss at 0.7200.
Timeline: 1-2 days.
Set a sell-stop at 0.7200 and a take-profit at 0.7100.
Add a stop-loss at 0.7270.
The AUD/USD price retreated slightly during the Asian session as the number of COVID cases in New South Wales (NSW) rose and after the strong US housing data. The pair is trading at 0.7240, which is slightly below this week’s high of 0.7270.
Australia COVID Cases
Australia is facing a major challenge dealing with the new COVID wave. Earlier today, the New South Wales government confirmed about 745 new cases, the highest reading this year. This means that the state’s lockdown will likely continue as the government ramps up its vaccination drive.
The AUD/USD tilted lower even as commodity prices rebounded. In the past few days, the Bloomberg Commodity Index has been in a strong bullish trend. Some of Australia’s key commodities like iron ore and copper rose as the market anticipated higher demand from China. The Australian dollar is often seen as a proxy for commodity prices.
Meanwhile, the pair’s price action was because of the United States. On Monday, the country published strong existing home sales numbers. Similarly, yesterday, the government published strong new home sales data signalling that the housing market remains strong. Home prices have also risen substantially because of higher commodity and labor costs.
Looking ahead, the AUD/USD will react to the latest US durable goods data that will come out later today. Analysts expect that core durable goods rose by 0.5% in July while the headline durable goods orders fell by 0.3%.
The US will also publish last week’s initial and continuing jobless claims numbers on Thursday. The statistics agency will release the second estimate of the GDP data. In most cases, the second GDP estimate has minimal impacts on the US dollar. Next, the statistics bureau will release the latest Personal Consumption Index (PCE) data on Friday. The pair will also react to the virtual Jackson Hole summit.
AUD/USD Technical Analysis
The AUD/USD has been in a bullish trend in the past few days. It rose from last week’s low of 0.7105 to a high of 0.7270. On the four-hour chart, the pair moved above the 25-day and 50-day moving averages.
This is a positive thing for the pair. At the same time, the Relative Strength Index (RSI) has moved from the overbought level of 75 to 60. Therefore, the pair will likely maintain the bullish trend, with the next key resistance being at 0.7350.