AUD/USD has proven to be the most resilient so far, climbing for a third day in a row. During the mid-American afternoon AUD/USD pierced the key 0.6400 figure reinforcing bullish AUD/USD trader’s optimism. The currency pair is currently trading around its one-month high in the 0.6430 area. This movement is a sign of the overall positive bias we’re seeing in the markets.
According to market analysts, AUD/USD is breaking upside momentum. They cite technical indicators that suggest there’s room for much further gains. The 20 Simple Moving Average (SMA) is just hours away from crossing above the flatlining 100 SMA. For now, both averages are lying just above that 0.6280 figure. This crossover would be even more bullish confirmation if it happens. The 200 SMA remains formidable as a key resistance level at near 0.6460. This level may prove difficult resistance for the price to continue advancing over.
Near-term support for AUD/USD has formed just underneath with the flat 20 SMA at 0.6390. Support levels have been established at 0.6360 and 0.6325. These are important footprints, where buyers are more apt to dive in and continue the bullish charge should a correction occur. Resistance turns at 0.6435, 0.6470 and 0.6505. On the bullish side, the 0.6435 level is viewed as key to maintaining the bulls’ momentum.
Technical indicators are still floating just above their midlines into neutral territory showing varied strength which is a reflection of a dual outlook right now. Yet, a successful breach above the key 0.6435 resistance hurdle could set the stage for another bullish leg upward for AUD/USD. Given the big economic data coming up, market sentiment is still hedgingly positive.
Investors are particularly looking out for the next big Australian inflation reading on Wednesday, after a mild surprise in Q2. The reserved quarterly Consumer Price Index (CPI), and the Reserve Bank of Australia’s own Trimmed Mean CPI, will provide important details about whether inflation is truly dropping. These three data points are sure to dominate AUD/USD price action in the days and weeks ahead.