The AUD/USD pair has resumed its uptrend, coming just shy of the key level of 0.6800. The Dollar has traded in a mixed manner following the US holiday, while Chinese business activity in the manufacturing sector has shown disappointment in August.
At the start of the week, the AUD regained momentum, driven by a weakening Greenback and improving conditions for risk-related assets. Despite a slight decline in copper and iron ore prices, the AUD’s upward momentum remains strong, supported by the breakout of the key 200-day SMA at 0.6614.
Recent monetary policy decisions by the Reserve Bank of Australia (RBA) have also contributed to the AUD’s rise. Governor Michelle Bullock’s hawkish stance on inflation and the debate among RBA members on raising the cash rate target have further boosted optimism around the currency.
However, concerns about the slow recovery of the Chinese economy and potential rate cuts from the Fed may limit the Australian dollar’s gains. Speculators remain net short on the AUD, although the latest CFTC report shows a decrease in short positions.
Technical analysis suggests that further gains for the AUD/USD pair could push it towards the August high of 0.6823, with support levels at 0.6663 and 0.6614. The four-hour chart indicates a range-bound trade, with resistance at 0.6823 and support at 0.6706 and 0.6697.
Overall, the AUD’s strength against the USD is influenced by various factors, including monetary policy decisions, economic data from China, and market sentiment. Investors should keep an eye on these developments to make informed decisions about their investments and financial strategies.