Higher On The Day But Retreats From Resistance

After taking a run at 0.7341 the Aug17/31 high supported by positive risk sentiment AUD/USD retreated from the level and dropped to around the 0.73 handle before finding support. The pair finished the day with gains and last trades up 1 pip at 0.7317.

• From a technical perspective AUD/USD maintains a firmer tone and has traded above the 20-day EMA. Recent gains are still considered corrective though. The breach of 0.7290 on Aug 17 confirmed an extension of the bearish price sequence of lower lows and lower highs, reinforcing a downward cycle. Price has also cleared 0.7200 and this opens 0.7053 further out, a Fibonacci retracement. The next firm resistance is seen at 0.7388/89, the 50-day EMA and the Aug 11 high.
• It is a busy data session today, focus will fall on Q2 GDP data, with most of the sell-side research that we have seen pointing to downside risks to consensus. Elsewhere CoreLogic house price data will be eyed. Further afield, participants will look to the latest Chinese Caixin m'fing PMI survey as a potential source of impetus.