Key Highlights
- AUD/USD started a fresh increase above the 0.7280 resistance.
- It broke a major bearish trend line with resistance near 0.7315 on the 4-hours chart.
- EUR/USD extended its increase, while GBP/USD is still below 1.3800.
- The US ISM Manufacturing PMI increased from 59.5 to 59.9 in August 2021.
AUD/USD Technical Analysis
The Aussie Dollar started a steady increase from the 0.7106 low against the US Dollar. AUD/USD broke many hurdles near 0.7200 and 0.7250 to move into a positive zone.
Looking at the 4-hours chart, the pair was able to climb above the 0.7300 resistance zone. There was a break above the 50% Fib retracement level of the downward move from the 0.7426 swing high to 0.7106 swing low.
There was also a break above a major bearish trend line with resistance near 0.7315 on the same chart. The pair is now trading above 0.7350, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
It is now consolidating above the 76.4% Fib retracement level of the downward move from the 0.7426 swing high to 0.7106 swing low. An immediate resistance is near the 0.7400 zone.
A close above the 0.7400 resistance might open the doors for a move towards 0.7500. On the downside, an initial support is near the 0.7320 level. The main support is now forming near 0.7300, below which the pair could correct lower towards 0.7220.
Fundamentally, the US ISM Manufacturing Purchasing Managers Index (PMI) was released yesterday by the Institute for Supply Management’s (ISM). The market was looking for a minor decline from 59.5 to 58.6.
The actual result was better than the forecast, as the US ISM Manufacturing increased from 59.5 to 59.9 in August 2021. On the other hand, the Employment Index declined from 52.9 to 49.0.
Looking at EUR/USD, the pair was able to clear the 1.1800 resistance zone and it is currently showing signs of more upsides.
Economic Releases
- US Initial Jobless Claims – Forecast 345K, versus 353K previous.
- US Factory Orders for July 2021 (MoM) – Forecast +0.3%, versus +1.5% previous.
