Australian Dollar climbs as the Greenback falls on soft US data

The Australian Dollar reached near two-month highs of 0.7129, bolstered by a weaker US Dollar, as US economic data proved scarce after last week's weaker Retail Sales figures. The AUD/USD rises by 0.32% to 0.7106, with mixed sentiment prevailing. Oil prices trend upward following Donald Trump's statement that the US-Iran war is not an urgent matter to end.

This has reignited inflation concerns in the US, with Treasury yields, particularly the 30-year bond yield, reaching levels seen in 2007 during the Great Financial Crisis. The US economic calendar includes the NY Fed Empire State Manufacturing Index, which hit its highest level in four years, showing mixed sub-components. Upcoming data from the US includes the Federal Reserve's last meeting minutes on August 19, jobless claims data, and Flash PMIs on August 20 and 21, respectively.

On the Australian side, the Westpac Consumer Confidence for August and the Wage Price Index for Q2 are expected on August 18 and 21, respectively. In the daily chart, AUD/USD trades at 0.7105, remaining bullish near-term as it stays above a dense cluster of rising trend-line supports between 0.7058 and 0.7087, and above the 50-, 100-, and 200-day simple moving averages around 0.6992.

Price is testing a longer-term ascending trend line near the market, with the Relative Strength Index at 65 indicating strong but not yet extreme bullish momentum. On the upside, resistance is defined by the longer-term rising trend line slightly above the current spot near 0.7111; a sustained breakout could continue the uptrend.

On the downside, immediate support is seen at the current trend-line pivot zone around 0.7105, followed by ascending supports at 0.7087, 0.7086, and 0.7058, with the major simple moving averages around 0.6992 serving as deeper strategic support. The Reserve Bank of Australia (RBA) sets the level of interest rates for Australian banks, influencing overall interest rates.

The RBA's goal is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. High interest rates support the AUD, while low rates weaken it. China is Australia's largest trading partner, and fluctuations in its economy directly impact the AUD's value. Iron Ore, Australia's largest export, also affects the currency; higher prices and a positive Trade Balance strengthen the AUD, while lower prices and a negative Trade Balance weaken it.