AUD/USD: near 4-month highs

13 July 2017, 12:23

Today, the pair AUD / USD again approached the annual highs of 4-month old near the 0.7745 mark. The Australian currency is growing, receiving double support from strong data on China's foreign trade balance and after the publication of the consumer price inflation indicator in Australia. According to data presented today (04:00 GMT + 3) by the Melbourne Institute, expectations for consumer price inflation rose 4.4% in July (the previous value + 3.6%). The high value of the indicator is positive for AUD.

A little later (05:00 GMT + 3) came out strong indicators on China's trade balance. According to the data provided, exports in June increased (for the fourth consecutive month) by 11.3% compared to the same period of the previous year after an increase of 8.7% in May.

The annual import growth in June was 17.2% after the growth of 14.8% in May (the forecast was + 12.4% compared to the same period of the previous year).

China's foreign trade surplus rose to $ 42.77 billion in June from $ 40.81 billion in May, with a forecast of $ 44.2 billion; By about 5%.

China is the largest trade and economic partner and buyer of primary commodities in Australia. Iron ore and coking coal account for about 30% and 12% of Australia's commodity exports, respectively. And most of the Australian raw materials exports are directed to China. Therefore, strong macroeconomic indicators from China have a positive impact on the quotes of the Australian currency.

At the same time, the AUD / USD pair is growing on the weakening of the US dollar after yesterday, Fed Chairman Janet Yellen in his report in the US Congress confirmed plans for a "gradual" increase in interest rates. However, in her opinion, it is necessary to adhere to the gradual way of raising interest rates in the next few years.

Today, Janet Yellen speaks to the US Senate Banking Committee. Investors are mostly skeptical about further tightening of monetary policy in the US against the backdrop of a slowdown in inflation. It is likely that today Janet Yellen will not say anything new. Market participants are ready for the December rate increase in the US, but will closely follow the performance of Yellen. Any hints from Yellen about the possibility of raising the rate in September will cause a sharp increase in the US dollar. Janet Yellen's speech will begin at 17:00 (GMT + 3).

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Support and resistance levels

At the beginning of today's European session, the pair AUD / USD is trading at the upper border of the rising channel on the daily chart, closely approaching the annual highs near the 0.7745 mark.

The positive dynamics of the AUD / USD pair is maintained above the key support level of 0.7530 (EMA200, EMA144 on the daily chart). The targets for the AUD / USD pair in case of its further growth will be the levels of 0.7780 (EMA144 on the weekly chart), 0.7840 (the Fibonacci retracement level of 38.2% correction to the wave of decline from July 2014, the minimum wave is near 0.6830), 0.8000 (EMA200 On a weekly chart).

 Only in case of breakdown of short-term support levels of 0.7585 (EMA200 and the bottom line of the uplink on the 4-hour chart), 0.7635 (EMA200 on the 1-hour chart) can we speak about the return of the downward dynamics of the AUD / USD pair.

In the case of the development of the downward dynamics and breakdown of the key support level 0.7535 (EMA200, EMA144 on the daily chart), the bearish trend will again prevail in the dynamics of the AUD / USD pair. In this case, the targets will be the levels of 0.7460 (the Fibonacci level is 23.6% of the correction to the wave of the pair's decline since July 2014, the minimum wave is near 0.6830), 0.7420, 0.7375, 0.7330 (November and May lows).

Support levels: 0.7710, 0.7635, 0.7585, 0.7535, 0.7500, 0.7460, 0.7420, 0.7375, 0.7330

Levels of resistance: 0.7750, 0.7780, 0.7840, 0.8000


Trading Scenarios

Sell ​​Stop 0.7690. Stop-Loss 0.7750. Take-Profit 0.7635, 0.7600, 0.7585, 0.7535, 0.7460, 0.7420, 0.7375, 0.7330

Buy Stop 0.7750. Stop-Loss 0.7690. Take-Profit 0.7780, 0.7840, 0.7900, 0.8000

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