AUD/USD is achieving a post-wedge target. The bulls are heading higher ahead of the central bank’s decision -by Ecork

Australian Dollar, AUD/USD, RBA, China, Technical Outlook – TALKING POINTS

  • Australian dollar rises despite weak US session and lower iron ore prices
  • RBA interest rate decision and US House Speakers’ visit to Taiwan poses risks
  • AUD/USD prices at its target after the wedge as oscillators remain intact

Asia Pacific forecast for Tuesday

The Australian dollar is tracking a rally against a broadly weak US dollar ahead of today’s interest rate decision from the Reserve Bank of Australia. US stocks closed slightly lower overnight, with the S&P 500 down 0.28%. Bond yields rose as traders sold Treasuries, adding to pressure on stock valuations. The July ISM PMI survey beat expectations, beating expectations at 52.8 versus 52.0 expected but still the lowest reading since June 2020.

Geopolitical tensions are in full swing as US House Speaker Nancy Pelosi heads to Taiwan. Ms. Pelosi’s visit is drawing strong condemnation from Chinese political leaders. China has warned of the consequences of the visit, and some have speculated that the Chinese military may fly planes over the island during the visit. This will likely result in the market’s response to risk.

China’s central bank, the People’s Bank of China (PBOC), issued a statement reiterating its support for the country’s struggling real estate sector. The People’s Bank of China (PBOC) pledged ample support and liquidity. The move comes on the heels of a series of nationwide mortgage boycotts and the weakest mortgage lending sector on record for June. Iron ore prices rose above $120 in China but have since fallen to around $117. The continued decline of the Australian dollar may lead to the withdrawal of the Australian dollar.

Today, South Korea’s inflation rate is expected to top the wires at 6.3%, which could be above 6% year-on-year in June. Also due are the Philippines Retail Price Index for May and Australian Home Loans for June. Japan will hold a 10-year Japanese Government Bond (JGB) auction at 03:35 GMT. The Reserve Bank of Australia’s interest rate decision is expected at 04:30 GMT.

AUD/USD technical forecast

AUD/USD is up more than 0.5% overnight, rebounding from the 50-day simple moving average. The pair now stands at a post-wedge target of 0.7036, with oscillators showing good momentum. If the bulls continue to pressure prices higher, the 100-day SMA may offer a concrete target. Alternatively, a pullback may look for support around the 50-day simple moving average.

AUD/USD daily chart

The graph was created using TradingView

— By Thomas Westwater, Analyst for

To contact Thomas, use the comments section below or Tweet embed on Twitter

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