Key Highlights
- AUD/USD recovered nicely above the 0.7350 resistance zone.
- It broke a major bearish trend line at 0.7380 on the 4-hours chart.
- The ISM Services PMI increased from 60.1 to 64.1 in July 2021.
- The US Initial Jobless Claims could decline from 400K to 384K in the week ending July 31, 2021.
AUD/USD Technical Analysis
The Aussie Dollar formed a base above the 0.7300 zone against the US Dollar. AUD/USD started a decent increase and it broke the key 0.7350 resistance.
Looking at the 4-hours chart, the pair gained pace above the 50% Fib retracement level of the key decline from the 0.7503 swing high to 0.7289 low.
There was also a break above a major bearish trend line at 0.7380. The pair settled above the 0.7350 level and the 100 simple moving average (red, 4-hours). However, it is facing resistance near the 0.7420 level.
The 61.8% Fib retracement level of the key decline from the 0.7503 swing high to 0.7289 low is also near 0.7420. The next major resistance is near 0.7450 and the 200 simple moving average (green, 4-hours).
A clear break above 0.7420 and 0.7450 could set the pace for more gains. On the downside, the first major support is near the 0.7380 level. The main support is forming near 0.7330 level, below which AUD/USD is likely to resume its decline towards 0.7250.
Fundamentally, the US ISM Non-Manufacturing Index for July 2021 was released yesterday by the Institute for Supply Management (ISM). The market was looking for an increase from 60.1 to 60.4.
The actual result was better than the forecast, as the US ISM Non-Manufacturing Index increased to 64.1, which indicates the 14th straight month of growth for the services sector.
Looking at EUR/USD, the pair spiked higher, but it failed to surpass 1.1900. Besides, GBP/USD may soon attempt an upside break above the 1.4000 resistance zone.
Economic Releases
- BoE Interest Rate Decision – Forecast 0.1%, versus 0.1% previous.
- US Initial Jobless Claims – Forecast 384K, versus 400K previous.
