AUDUSD recently bounced off its long-term support at the .7600 major psychological level and could be ready to test the top of the range again. 

Price is moving up towards the resistance at .7800, which might keep gains in check.

The top of the range is close to the 200 SMA, which has acted as a dynamic inflection point. The 100 SMA is moving below the 200 SMA, confirming that the path of least resistance is to the downside and that another selloff is likely.

In addition, stochastic is almost in the overbought area, suggesting that buying pressure is fading and that sellers could take control of price action. In that case, another move towards the .7600 handle is possible. RSI, is also on the move up and is edging close to the overbought region as well.

Earlier today, China released its official manufacturing and non-manufacturing PMI reports. The manufacturing PMI was steady at 50.2 as expected while the non-manufacturing PMI showed an improvement.

Later on, the US is set to print its ADP non-farm employment change report, which is considered a leading indicator of the NFP, which is due tomorrow. Analysts are expecting to see hiring gains of 219K from the ADP report, which would reflect a stronger pace of jobs growth compared to the previous month.

Stronger than expected data from the US could remind traders that the Fed could be able to hike interest rates in September, thereby spurring dollar demand. In addition, risk aversion could favor the US dollar as traders price in the possibility of a Grexit and euro instability now that Greece defaulted on its loan to the IMF.

On the other hand, weak US jobs data could undermine the possibility of Fed tightening, especially with financial market risk from the Greek debt crisis. This could lead to a pop higher for AUDUSD and a potential upside break from the range resistance.

By Kate Curtis from Trader’s Way