AUD/USD daily chart
AUD/USD is up 0.4% today to 0.6820 currently as buyers are staying poised in search of a break to the upside. The high yesterday did briefly breach the May high of 0.6818 and the resistance region around 0.6793-00, but the daily close (0.6795) fell short at confirming a breakout.
Fast forward to today, and the pair is now perhaps finding added impetus to chase a break after the hot Australian jobs report here.
That has bolstered the case for the RBA hiking rates in July. Looking at aussie cash rate futures, markets were previously convinced that the RBA would not hike next month as the pricing before today was roughly 75% for no change and 25% in favour of a 25 bps rate hike. But as at time of writing, that has now switched to be virtually a coin flip with roughly 51% odds of no change and 49% odds of a 25 bps rate hike priced in.
That explains the aussie’s outperformance today, despite risk sentiment being slightly more sluggish. And amid a further softening in the Chinese yuan, the aussie is able to brush that aside – at least for now – unlike the kiwi, which is down 0.4% against the dollar.
From a technical perspective, a firm break above the 0.6793-00 region and better yet, the May high of 0.6818, will provide added bullishness to the pair in the chase towards 0.7000 next potentially.
That especially if economic data continues to force the RBA into a more hawkish pivot moving forward.