The Australian Dollar (AUD) is slightly weaker, last seen trading at 0.7146 against the US Dollar (USD) during European trading hours on Tuesday. The currency pair sees slight losses as the US Dollar gains after US Treasury yields and oil prices rise amid growing tensions in the Middle East. Currently, the DXY US Dollar index, which measures the strength of the Greenback against six other currencies, is slightly higher and near 99.50. 10-year US Treasury Yields reached a new 19-month high of 4.78% and are closer to their multi-year high of 4.81%. From a domestic perspective, markets will watch the US ISM Manufacturing PMI reading for August and the JOLTS Job Openings report for July, both of which will be released at 14:00 GMT. In Australia, traders will await Q2 Gross Domestic Product (GDP) data, scheduled for release on Wednesday.
The AUD/USD currency pair is currently trading around 0.7158, against the backdrop of a very strong bullish trend emerging from a late July low of 0.6920 on the daily time frame. The overall picture of this asset remains quite positive, as the price has maintained higher lows and higher highs, and the recent upswing has allowed it to break through the previous 0.7058 level of resistance. However, buying interest is weakening near the 0.7190-0.7213 range. Nevertheless, the pair holds above its ascending central moving average, which lies around 0.7130, and thus maintains the bias towards further gains in the medium term. Volatility bands also widen, indicating the strength of the preceding impulse, but price has already rolled off its top edge. This means the market may enter consolidation or correction ahead of the next impulse higher. It all depends on buyers' ability to hold onto the current support zone. The initial level of support exists at 0.7130, while the most significant one lies between 0.7105 and 0.7080. Holding above these levels will keep the bullish pattern intact and draw new dip buyers. In the event of failure to hold above this range, 0.7058 stands out as a critical technical support level, as it was the previous breakout region. If a daily close below 0.7058 is achieved, it will invalidate the existing trend. On the brighter side, short-term resistance is at 0.7165, 0.7195, and the recent high of 0.7213. A successful break above 0.7213 will indicate that the bulls are back in control and could push toward even higher psychological levels. Momentum oscillators have been favorable, with the MACD remaining in the positive region; however, the histogram shows a slowdown in the pace of an upward move. The RSI level of 57 is positive, and there is space left for an upward move. AUD/USD remains bullish on the daily chart, but it lacks the momentum it had during its breakout phase. Bullish players have to defend the 0.7130 level and clear 0.7213 to continue advancing. The bears have to take out the current levels of support, which will result in a deeper pullback; therefore, the coming days will be crucial in determining whether this is just a rest amid an existing trend or a correction.
