AUD/USD: stabilizing the offer post Chinese data, copper bid

Currently, AUD/USD is trading at 0.7965,  having posted a daily high at 0.7991 and low at 0.7956.

Australia monthly inflation gauge ticked up in July

AUD/USD shown a mute reaction to the Chinese NBS manufacturing and non-manufacturing data today where expectations were missed on the manufacturing and lower than previous on non-manufacturing. However, there has been a bid in copper (+0.59% Sep) since the data as a supportive factor to the Aussie.

At the same time, TD Securities inflation y/y was 0.4% higher than previous, supportive to the Aussie that some analysts would say is somewhat overstretched ahead of this week's RBA and nonfarm payrolls at the end of the week, having scored through but also having lost the 0.80 handle last week. 

AUD/USD 1-3 month: 

Analysts at Westpac argued that much of AUD/USD's gains have been driven by broad US dollar weakness. "But there has also been a partial recovery in Australia's key commodity prices, after very steep declines in April and May. However, beyond multi-week gains, a firmly on hold RBA is likely to keep a lid on AUD/USD, easing to 0.74 by year-end," explained the analysts on a longer-term view.

AUD/USD levels

AUD/USD: The 100 MMA continue to act as a magnet

Valeria Bednarik, chief analyst at FXStreet explained that, technically, the risk remains towards the upside as the price is well above a bullish 20 SMA, while technical indicators hold within overbought territory, these lasts, with no certain directional strength. "In the 4 hours chart," she added, "technical indicators turned lower within positive territory, whilst the 20 SMA maintains a bullish slope below the current level, suggesting downward moves will likely remain limited. Anyway, the key support is 0.7870, in where the pair bottomed the past two weeks, with a break below it required to confirm a downward move ahead."