AUDUSD has been trending higher and is moving inside a bullish channel formation on its 4-hour chart.

Price is bouncing off the resistance and could be due for a pullback from here. Stochastic is turning lower from the overbought zone to show that buyers are taking a break and allowing sellers to take over. 

Applying the Fibonacci retracement tool on the latest swing low and high shows that the 61.8% level lines up with the channel support around the .7650 minor psychological level. The 100 SMA is also close to the bottom of the channel, adding to its strength as support. This short-term SMA is above the longer-term 200 SMA to show that the path of least resistance is still to the upside. 

Economic data from China, Australia’s main trade partner, turned out mostly stronger than expected. The economy grew by 6.9% in Q2 versus expectations of a dip to 6.8%. Retail sales and industrial production also ticked higher, reflecting strong internal demand and a likely boost to Australia’s commodity exports. 

The RBA will release its monetary policy meeting minutes today and give more insight as to why they decided to keep policy unchanged and when they might consider hiking rates. In the US, economic reports have been mostly weaker than expected lately, particularly when it comes to CPI and retail sales.

Australia will release its jobs report later in the week and likely report a slower increase in hiring. There’s not much in the way of top-tier data from the US this week but traders could start pricing in less upbeat remarks for the FOMC meeting next week. 

By Kate Curtis from Trader’s Way