The AUDUSD pair, currently at 0.68166, is experiencing increased momentum, leading its value to rise to a level above 0.6800, which is the highest it has been in three weeks.

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• AUD/USD gains traction to reach a three-week high above the 0.6800 mark.

The pair currently trades last at 0.68166.

The previous day high was 0.6796 while the previous day low was 0.6682. The daily 38.2% Fib levels comes at 0.6753, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6726, expected to provide support.

The AUD/USD pair gains momentum and surges above the 0.6800 area, approaching its highest level since June 20.

The pair remains well supported by some follow-through broad selling in the US Dollar, in the face of a weaker US Consumer Price Index (CPI) on Wednesday.

The latest Chinese data shows that China’s Trade Balance came in at CNY491.25 billion in June versus CNY 452.33 billion prior. Meanwhile, the Dollar value of China’s exports plunged 12.4% in June, worse-than-expected of a 9.5% decline and 7.5% decrease in May, while imports fell 2.6% versus 2.3% the previous month.

It’s worth noting that Australia is a major resource exporter to China. Therefore, investors perceive the Australian dollar as a proxy for the Chinese economy. The latest data fuelled renewed concerns about a likely economic slowdown in China, which could act as a headwind for the AUD/USD pair.

On the Australian Dollar front, the RBA governor Philip Lowe outlined a major overhaul of the RBA and hinted at further interest rate increases. Nevertheless, the key driver for AUD/USD is the odds of additional rate hikes by the Fed.

Apart from this, Wednesday’s US Consumer Price Index (CPI) rose 0.2% in June, lower than the expectation of 0.3%. The annual figure dropped from 4% to 3%, missing the market expectation of 3.1%, the lowest reading since March 2021. The yearly core CPI fell from 5.3% in May to 4.8% in June, a worse-than-expected of 5%.

In the meantime, markets have priced in a 25 basis points (bps) rate hike in the Fed meeting in July. However, the speculation that the Federal Reserve (Fed) will end the tightening cycle later in the year weighs on the Greenback and lends some support to the Aussie.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6813 at the time of writing. Pair opened at 0.6786 and is trading with a change of 0.4 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.6718, 50 SMA 0.6681, 100 SMA @ 0.6683 and 200 SMA @ 0.6701.

The previous day high was 0.6796 while the previous day low was 0.6682. The daily 38.2% Fib levels comes at 0.6753, expected to provide support. Similarly, the daily 61.8% fib level is at 0.6726, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6713, 0.6641, 0.6599
• Pivot resistance is noted at 0.6827, 0.6869, 0.6941

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