- Upbeat Chinese macro releases helped the pair to build on the last week’s positive move.
- The USD remained depressed amid Fed rate cut bets and provided an additional boost.
The AUD/USD pair now seems to have entered a bullish consolidation phase and was seen oscillating near the top end of its daily trading range, or 1-1/2 week tops.
The pair built on last week’s goodish bounce from near three-week lows and continued gaining positive traction for the fourth consecutive session on Monday in the wake of stronger-than-expected economic releases from China.
Data released at the start of a new trading week showed China’s industrial output bounced in June to 6.3% from a 17-year low in the previous month and June retail sales surged 9.8%, both surpassing estimates by a healthy margin.
Meanwhile, the Chinese GDP for the second quarter of 2019 matched expectations and came in to show a yearly growth of 6.2%, 1.6% on a quarterly basis and provided an additional boost to the China-proxy Australian Dollar.
The pair climbed back closer to the 0.7035-40 supply zone and was further supported by a subdued US Dollar price action, which remained on the defensive amid expectations that the Fed will cut interest rates later this month.
Comments by Chicago Fed President Charles Evans on Friday added to the Fed Chair Jerome Powell’s dovish remarks earlier during the week and indicated that the US rate cuts are needed to boost inflation.
Against the backdrop of the Fed Chair Jerome Powell’s dovish remarks earlier during the week, the Chicago Fed President Charles Evans on Friday indicated that the US rate cuts are needed to boost inflation.
The USD bulls seemed rather unaffected by a strong follow-through uptick in the US Treasury bond yields, which remained supported by last week’s hotter-than-expected US core CPI and the subsequent release of the PPI report.
Moving ahead, Monday’s US economic docket – featuring the release of Empire State Manufacturing Index, followed by a scheduled speech by New York Fed President John Williams will now be looked upon for some fresh impetus.
Technical levels to watch
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