AUD/USD pops and drops after Aussie Home Loans data

• AUD/USD added 10 pips to hit session highs above 0.6850 after upbeat Aussie home loans data.
• Session highs could be refreshed if riskier assets put on a good show.

AUD/USD has witnessed a two-way business in the last few minutes.

The currency pair picked up a bid around 0.6842 at 01:30 GMT, possibly on the back of an Australian data showing the home loans rose by 5% in July, having dropped 0.8% in the preceding month.

AUD/USD went on to hit a session high of 0.6851 soon before press time and is currently trading at 0.6842.

Looking forward, the currency pair may rise to fresh session highs above 0.6851 if the risk assets remain bid. As of writing, the futures on the S&P 500 are reporting a 0.15% gain.

The People’s Bank of China on Friday announced a broad-based 50 basis point cut in the reserve requirement ratio (RRR), which is set to take effect from Sept. 16. In addition, the central bank announced an extra 100 basis point cut in the RRR for city commercial banks.

Further, the news hit the wires earlier today that China may announce more RRR cuts later this year. The markets are also expecting the European Central Bank (ECB) to announce aggressive measures this Thursday.

So, there is a strong reason for riskier assets to put on a good show. However, the upside may be capped due to the dismal China trade data released on Sept. 8.

The country’s dollar-denominated fell by 1%, while its imports contracted 5.6% year-over-year last month.  Notably, imports have decreased year-on-year, every month this year, except April, which indicates deteriorating domestic demand.

Technical levels