AUD/USD Price Retests 0.7012 Ahead of RBA Rate Hike use

 

• The AUD/USD pair maintains a bullish bias despite temporary retreats.
• A new lower low could activate more declines.
• Taking out the near-term resistance levels may announce further growth. 

The AUD/USD price rallied in the short term. However, the pair has found strong resistance at 0.7046. It seems poised to drop down and retest the near-term support levels before resuming the upside.

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The pair is trading at 0.7013 at the time of writing. In the short term, the bias remains bullish and the price could still resume its growth despite temporary drops as the Dollar Index is in a corrective phase.

Technically, the price action developed an up-channel pattern. The formation could signal a new downside movement eventually. Still, it’s premature to talk about a steeper fall.

Fundamentally, the Chinese economic data came in worse than expected yesterday. The Non-Manufacturing PMI was reported at 53.8 points below 53.9 points expected, while the Manufacturing PMI dropped unexpectedly from 50.2 to 49.0 points, even if the specialists have expected a potential growth to 50.3 points.

Today, the Australian AIG Manufacturing Index came in at 52.5 points versus 54.0 in the previous reporting period, MI Inflation Gauge rose by 1.2%, while the ANZ Job Advertisements registered a 1.1% drop.

Later, the US economic data could change the sentiment. The ISM Manufacturing PMI is seen as a high-impact event and it could drop from 53.0 points to 52.3 points. In addition, the Final Manufacturing PMI, Construction Spending, and ISM Manufacturing Prices will be released as well. 

AUD/USD price technical analysis: Channel formation

After its strong upside, the AUD/USD pair dropped a little to retest the 0.7012 key downside obstacle. As long as it stays above this level, the price could try to resume its swing higher.

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Consolidating above this level or developing a bullish pattern could signal further growth. In the short term, the pair trapped within an up channel pattern. Staying above the 0.7012 and making a new higher high could activate a strong rally. The upside line and the weekly R1 (0.7050) are seen as near-term upside obstacles. A new lower low, dropping and closing below the 0.7007 could activate more declines in the short term.  

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