AUDUSD has been trending higher on the short-term time frames, moving above a rising trend line connecting the recent lows of price action. The pair is currently testing this support area and could be due for a bounce or a break.
The 100 SMA lines up with this rising trend line and could add to its strength as support. If so, AUDUSD could resume its climb to the previous highs at .7650 and beyond. On the other hand, a break lower could spur a reversal for the pair.
The 100 SMA is above the 200 SMA for now, which means that the path of least resistance is to the upside.In addition, stochastic is indicating oversold conditions so a return in buying pressure could be imminent once the oscillator turns higher.
Earlier today, the RBA released the minutes of its latest policy meeting, which indicated that the central bank was more worried about inflation than they sounded during their actual statement. This could keep the door open for interest rate cuts and these speculations are currently weighing on the currency.
Building permits and housing starts are up for release from the US economy and stronger than expected figures could renew demand for the Greenback. The US stock market has been performing really well, thanks to upbeat earnings figures from top companies in the tech and banking sectors.
Later on in the week, Australia will print its NAB quarterly business confidence index while the US is set to print its Empire State manufacturing index. Downbeat figures from Australia and strong data from the US could reinforce a potential selloff.