AUDUSD has been trending higher on its short-term time frames, moving inside a rising channel on its 1-hour chart. Price is currently testing the resistance, paving the way for a potential counter trend setup until support at .7550-.7600.
The 100 SMA is crossing above the 200 SMA to indicate that the path of least resistance is to the upside. This confirms that the channel support is likely to hold and keep losses in check. It might even allow price to climb after reaching the mid-channel area of interest or from its current levels.
RSI is pointing up without even reaching the oversold area so buyers are eager to get back in the game. Stochastic is also pointing up to suggest a return in bullish pressure. In that case, an upside break past the channel resistance at .7700 could be possible.
Data from Australia has been mixed, as private sector credit saw a stronger than expected 0.6% gain versus the estimated 0.5% increase while HIA new home sales slumped 5.3%. The upcoming Chinese PMI releases could provide a stronger direction for AUD pairs.
Both the official and Caixin versions of the PMI report are slated to show improvements to indicate a slower pace of contraction in the manufacturing industry. If so, the Aussie could gain ground on expectations of higher demand for its raw material commodity exports. On the other hand, downbeat results could be bearish for the Aussie.
As for the US dollar, the NFP release could also provide some volatility. A 206K gain is expected, lower than the previous 242K gain, but a higher than expected read could revive Fed rate hike talks. While Fed head Yellen noted that further caution is warranted, her policymaker peers appear to be more confident about US economic prospects.
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