AUD/USD Price Forecast: Rising 20-day EMA backs more upside

The Australian Dollar (AUD) remains slightly below 0.7164 against the US Dollar (USD) as of Tuesday's European trading session. This decline in the Aussie pair occurs alongside a rise in the US Dollar, driven by escalating US Treasury yields and increasing oil prices due to Middle East unrest. As of now, the US Dollar Index (DXY) is marginally up near 99.50, with 10-year US Treasury yields peaking at 4.78% and nearing their multi-year peak of 4.81%.

Upcoming economic indicators, such as Australia's Q2 Gross Domestic Product (GDP) data on Wednesday and the US ISM Manufacturing PMI and JOLTS Job Openings data, will influence the AUD/USD exchange rate. ING's Asia-Pacific research team anticipates that Australian GDP growth will decelerate to 1.8% year-on-year in the second quarter, citing weakening housing demand, lower residential investment, and the positive inflation figures from July that could lead to another Reserve Bank of Australia rate hike.

However, ING still expects the RBA to hold rates. Currently, AUD/USD stands above the 20-period exponential moving average (EMA) at 0.7118, indicating a continued bullish trend. The Relative Strength Index (14) at 63.09 also remains positive, suggesting that buyers have room to push the price higher. Should the pair retreat, the initial support level lies at the 20-day EMA at 0.7118. If the price manages to rise above this, the next target is the four-year high of 0.7278.