The US Dollar continues to face pressure as recent data shows strong growth alongside decreasing inflation. A positive US Retail Sales report indicates that consumer spending may not be as weak as previously thought, supporting a soft-landing scenario and boosting risk sentiment. In contrast, the Australian Dollar is strengthening against the USD due to increased risk appetite in the market. The weakening greenback could be linked to the USDJPY selloff, which may have influenced other markets as well.
The Australian Dollar is also being supported by a hawkish Reserve Bank of Australia (RBA) due to persistent inflation. The upcoming Australian Q2 CPI report on July 31st will be a key event to watch for further market movement.
Looking at the technical analysis, on the daily chart, AUDUSD has bounced back from the support level around 0.6713, indicating a potential continuation of the uptrend as buyers enter the market. However, sellers will need the price to drop below 0.6713 to regain control and push for a decline towards the 0.66 level.
On the 4-hour chart, the bounce from the support level is more evident, accompanied by increased momentum amid USD weakness. Zooming in on the 1-hour chart, the price has reached a key resistance at 0.6750, where it has been rejected multiple times in recent weeks. Buyers will aim for a breakout above this level to strengthen bullish positions, while sellers may look to enter the market for a potential drop below 0.6713 with a favorable risk-to-reward ratio.
Looking ahead, today features Fed’s Waller speaking, with tomorrow bringing the Australian Labour Market report and US Jobless Claims figures. These upcoming catalysts could provide further insights into market direction and potential trading opportunities for AUDUSD traders.