AUD/USD intermarket: risk on, headed for the 0.80 multi year high resistance?

Currently, AUD/USD is trading at 0.7956, up 0.49% on the day, having posted a daily high at 0.7961 and low at 0.7909.

AUD/USD is making a case for the 0.80 handle having just tested the key 0.7950 level and scoring the aforementioned highs. The move can be attributed to a rise in iron ore and risk-on markets developing as the US session moves along. WTI is fueling supportive of US stocks with the S&P 500 making fresh record highs at 2,471.47. 

However, if it wasn't for DXY holding onto gains today, +0.21% on 94.80 support, AUD/USD could have tallied up further demand towards the multi year resistance level of 0.8000 ahead of the key jobs data on the cards tonight in the Asian shift while CPI arrives next week.

"With inflation playing a key role in the RBA's policy reaction function, 2Q CPI data next week (26 July) will be critical for markets. Any disinflationary signs – as witnessed in neighbours New Zealand this week – could trigger a dovish reassessment in markets," explained Viraj.Pate, analysts at ING bank, adding, "Ahead of this, there is now even greater focus on RBA Deputy Governor Debelle's speech on Friday – which is aptly called "Global Influences on Domestic Monetary Policy". It may well be time for the central bank to roll out its full jawboning toolkit given that the trade-weighted AUD/USD is close to breaching a key multi-year resistance level."

AUD/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that in the short term, the 4-hours chart supports further gains ahead as the 20 SMA maintains its strong bullish slope below the current level, now around 0.7870, while technical indicators turned flat in overbought territory. "Renewed buying interest above the mentioned daily high should favor an extension up to the 0.8000/30 region."