AUD/USD Could Rally Further If It Clears 0.7200

Key Highlights

  • AUD/USD remained in a positive zone above the 0.7080 pivot level.
  • A key bullish trend line is forming with support near 0.7100 on the 4-hours chart.
  • The US Consumer Confidence (CB) declined from 98.3 to 92.6 in July 2020.
  • The Fed Interest Rate Decision is scheduled today (forecast co change from 0.25%).

 

AUD/USD Technical Analysis

After a successful close above 0.7000, the Aussie Dollar extended its rise against the US Dollar. AUD/USD climbed above the 0.7100 resistance, but it is facing hurdles near 0.7200.

Looking at the 4-hours chart, the pair tested the 0.7180 zone before correcting lower. It declined below the 0.7100 level, but it remained well above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

The last swing low was near 0.7063 and the recent high was near 0.7176. If there is a successful break above the 0.7200 resistance, the pair is likely to accelerate higher towards the 0.7250 and 0.7260 levels.

Conversely, the pair could correct lower below 0.7120. However, there are many supports on the downside near 0.7100 and 0.7080. There is also a key bullish trend line forming with support near 0.7100 on the same chart.

The main support zone is near the 0.7050, below which there is a risk of a sharp decline towards 0.7000 or even 0.6980 in the near term.

Fundamentally, the US Consumer Confidence index for July 2020 was released by the Conference Board. The market was looking for a decline from 98.1 to 94.5.

The actual result was below the market expectation, as the CB Consumer Confidence declined to 92.6. The last reading was revised up from 98.1 to 98.3.

Overall, AUD/USD is likely to extend its upward move above the 0.7200 resistance. Looking at other majors, GBP/USD climbed further above 1.2900, but EUR/USD seems to be facing hurdles near 1.1800.

Upcoming Economic Releases

  • US Pending Home Sales for June 2020 (YoY) - Forecast -10.2%, versus -5.1% previous.
  • Fed Interest Rate Decision - Forecast 0.25%, versus 0.25% previous.