The AUD/USD currency pair extended weekly gains on Friday morning to hit a weekly high of about 0.7009 before pulling back in the afternoon session to consolidate modestly just below 0.7000.
The currency pair’s latest rally came in the form of a rebound from a major plunge late last week, which was triggered by the positive US non-farm Payrolls data.
However, with the Federal Reserve Chair Jerome Powell issuing what was perceived to be a dovish statement on Wednesday followed by a tepid economic data on Thursday, the AUD has since rebounded to recoup the losses.
AUD/USD Fundamentals Overview
From a fundamental perspective, the AUD/USD currency pair is trading at the back of US Producer Price Index data, which beat expectations on all fronts.
The producer Price Index for June came in at 1.7% beating expectations of 1.6% on a YoY basis. The MoM growth came in at 0.1%, the same as the previous month thereby beating expectations of 0.0%.
Early in the morning, Australia’s biggest customer, China, saw its M2 Money Supply for June miss expectations of 8.6% after coming in line with the previous period’s figure of 8.5%. A lot more data for China is up early next week, which should set the ball rolling for the Aussie. This could push the AUD/USD currency pair well above 0.7000 if the data turns out positive for the Chinese economy.
AUD/USD Technical Analysis (the 60-min Chart)
From a technical viewpoint, the AUD/USD currency pair appears to be on the way back up following last week’s plunge. As demonstrated using Fibonacci Retracements, the currency pair’s exchange rate appears to be pinned just beneath the key level 61.80%. This creates some interesting trading opportunities for both the bulls and the bears.
The bulls will target profits at around the 76.40% Fib level at 0.7014 in the short-term while the bears will look to pounce by targeting profits at around 50% Fib level at 0.6979 or lower at 38.20% Fib level at 0.6962.
AUD/USD Technical Analysis (the Daily Chart)
In the daily chart, the AUD/USD currency pair appears to be trading within a bearish wedge on a long-term basis. Therefore, the bears retain control in the long-term.
However, in the intermediate time frame, the pair appears to be trading within an ascending channel, which supports the current attempt to recover above 0.7000.
In summary, the AUD/USD currency pair currently appears to be enjoying a short-term bullish bias, which has recently started to face some resistance around the 0.7000 level. However, with key fundamentals coming in early next week for the Aussie, the bull-run could continue.