By Perry Mitchell
Yesterday we saw the AUDUSD pair come under bearish pressure following on from uninspiring PMI data, a drop of just under 0.5% for the day proved to be the worst performing G10 currency. This morning, we have seen the AUD open relatively flat finding support just below 0.6980.
It was revealed that the business activity in Australia’s manufacturing and service sectors expanded at a slower pace in July than they did in June. The USD gathered strength in the last couple hours of the day and the pair struggled to move back into positive territory. The Aussie was unable to find much upside momentum despite anticipation ahead of the US-China trade talks in the week ahead.
Today, RBA Governor Lowe is speaking on Inflation targeting and Economic Welfare at 1:05pm AEST – This will be a catalyst for seeking clues for future monetary policy actions.
Tonight’s ECB decision is the next major global focus, with implied volatility skyrocketing to its highest reading of the year on the EURUSD pair. A rate cut priced at 50% markets are expecting at least a dovish turn from the President of the ECB Mario Draghi.
Taking a closer look at the AUDUSD daily chart, the pair finds itself sitting right at near-term rising support trend line from the middle of June. This follows an attempt to break above long term descending resistance from December as seen in the chart below.
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