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AUD/USD – Another Leg of the Uptrend?
Despite a few stomach churning drops along the way, the Aussie stubbornly remains in an uptrend as the only yielder amongst the major continues to attract carry trade flows. Today the unit got a major boost from the very disappointing US GDP data which ended all speculation of a possible Fed rate hike any time before the end of the year.
With US rates frozen at the lows, the Aussie was the natural beneficiary of yield hungry traders and ramped up through both the 7500 and the 7600 levels putting in its performance in several weeks.
The pair now has 7700 firmly in sight, but any progress beyond that level is likely to be stymied by the long term resistance at 7800 and by an RBA that clearly wants to see a lower exchange rate.
On Monday the market will get a look at the Chinese PMI data and of the number remains below the 50 boom/bust level, the Aussie could see some profit taking as traders will assume the RBA will use the weak Chinese economic demand as excuse to cut rates in August. For now 7500 is the near term support while 7700 is key resistance.