AUD/USD: outlook for August 1-7
AUD/USD managed to recover the previous week’s losses. Aussie was driven higher mainly by the general weakness of the US dollar. The most important upcoming event for Australian dollar is the meeting of the Reserve bank of Australia on Tuesday. Australian consumer prices rose by 0.4% in Q2 after declining by 0.2% in the first 3 months of the year. Higher inflation makes rate cut less likely. Still, the figures didn’t completely alter the expectations of RBA’s rate cut. The futures market still sees a 68% chance that the RBA cuts rate from 1.75% to 1.50%. As Australian central bank is not interested in high value of its national currency, it may after all cut the cash rate.
Resistance is at 0.7600 (psychological level) and 0.7670 (100-week MA). Support is at 0.7550, 0.7500 and 0.7430.
Lower commodity prices act as limitation for AUD bulls: oil remains under pressure and copper reversed down. Official China’s manufacturing PMI showed the nation’s factory activity fell in July. Pay attention to China’s services PMI on Wednesday. Australia will also release building approvals and trade balance on Tuesday, retail sales on Thursday and the RB monetary policy statement on Friday.