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AUD/USD holds above 0.7200 as US inflation data approaches
Traders are waiting for US inflation on the policy path for the Fed, while a BoJ-driven JPY rally and growing odds of an RBA hike support the Australian dollar.
AUD/USD was steady above 0.7200 during Thursday’s Asian session and stayed near its highest level since May 14, as traders held off positioning ahead of upcoming US inflation data, which is expected to influence the Federal Reserve’s policy trajectory, according to FXStreet.
The pair also benefited from factors tied to other central banks, including a hawkish Bank of Japan-inspired rally in the Japanese yen, which acted as a tailwind for AUD/USD, and rising expectations for another Reserve Bank of Australia rate hike later this month.
FXStreet added that markets have priced in a greater chance the Fed will raise borrowing costs at its September 15-16 policy meeting. It also noted that escalation of US-Iran tensions offered some support to the dollar as a safe haven, limiting upside momentum for AUD/USD.
On the technical side, FXStreet pointed to an uptrend since the August monthly low, with the RSI around 58, and a modest loss of upside momentum indicated by the MACD. It cited 0.7260 as channel resistance to watch, while 0.7172 near the 100-period SMA and 0.7161 at the channel floor were seen as key support levels.