“¢ Stronger Aussie data lifts expectations from Wednesday’s Q1 GDP growth figures.
“¢ Trade war fears weigh on the USD and remain supportive of the strong up-move.
The AUD/USD pair built on its bullish momentum further beyond 50-day SMA and is currently placed at 6-week tops, around the 0.7635 region.
With investors looking past Friday’s upbeat US economic data, the pair caught some strong bids at the start of a new trading week and was further supported by a duo of upbeat Aussie macro data.
The data came in the form of retail sales that recorded m/m growth of 0.4% as against 0.3% expected, which coupled with stronger than expected Q1 company operating profits fueled speculations of stronger Q1 GDP growth figures on Wednesday and lifted the Australian Dollar across the board.
The pair surged through the 0.7600 handle, with a modest US Dollar weakness providing an additional boost. Despite a goodish pickup in the US Treasury bond yields, returning trade war fears kept the USD bulls on the defensive and remained supportive of the pair’s strong up-move to the highest level since April 23.
The strong up-move could also be attributed to some technical buying above 50-day SMA. Hence, an extension of the bullish momentum, back towards the very important 200-day SMA, now looks a distinct possibility amid empty US economic docket.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: “The pair will likely chew through 0.7638 – descending trendline resistance in the next 24 hours. A move above the trendline hurdle would only strengthen the bullish case and would allow a rally to the 200-day moving average of 0.7756.”
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