AUD/USD: commodities on a better footing, AUD/USD targets 10-D SMA
In fact, the end of the week is going to be an interesting one for the Aussie given that all the FOMC minutes, the Fed Chairman Powell attending his first Jackson Hole symposium and US trade talks will resume after two months of quite around the same time of the week. Meanwhile, the Aussie took some relief on Friday in the easing trade risk sentiment and a pick up in the Chinese Yuan. AUD/USD bounced from 0.7252 to a high of 0.7318 and has left a bullish continuation closing daily stick on the charts. However, the Australian dollar remains vulnerable to TRY risk aversion. However, the August China/US trade talks news has so far taking the spotlight and despite RBA's Lowe saying that a further "moderate" AUD depreciation would be helpful.
A better day for the commodity complex
"A resumption of Turkish lira weakness (-3.1%) was brushed aside in Friday London/NY trade. US equities remained supported by Q2 earnings and in late trade, a Dow Jones/WSJ story claiming that US and Chinese officials were, “mapping out talks to try to end their trade standoff ahead of planned meetings between President Trump and Chinese leader Xi Jinping at multilateral summits in November,” analysts at Westpac explained, also noting that this was supported by White House economic adviser Kevin Hassett, who talked up this week’s meeting between lower level US and China officials (in contrast to adviser Kudlow’s dismissive comments) and also sounded upbeat on NAFTA negotiations.
The August 14th doji has so far served a bullish purpose and the price is supported by the prior descending resistance line and correcting higher. However, the fundamentals stack up with the broader technical outlook as the price accelerates down through the weekly channel. Only a sustained break above the 10-D SMA and then a close through 0.7360 could alleviate the near term bearish pressure.
Valeria Bednarik, chief analyst at FXStreet explained that in the daily chart, indicators have recovered from oversold readings, maintaining upward slopes but well below their midlines, as the price remains far below bearish moving averages:
"Shorter term, and according to the 4 hours chart, the technical outlook is more encouraging, as technical indicators remain near overbought readings, as the price moved far above its 20 SMA, which slowly gains upward traction."