After a setback from the softer Australia CPI data yesterday, the aussie currency is recovering well today as it is up 0.6% against the dollar to 0.6800 currently. The rebound comes off a softer dollar but is also helped by yet another move to defend the yuan by Chinese authorities this week.
The gains so far today are quite decent but looking at the daily chart, it is keeping within key technical levels that we have seen so far this month.
The 200-day moving average (blue line) helped to also limit the downside push at the start of the week, following a rejection from the June highs near 0.6900. Those are still the two big levels in play right now and price action is sitting right in the middle of that.
As such, for a real trending move, we will have to see either one or the other give way.
Towards the upside, a break of the June and July highs near 0.6900 will allow room to roam towards 0.7000 next at least. Meanwhile, a break below the 200-day moving average - now seen at 0.6726 - will then see the 100-day moving average (red line) be next in line at 0.6691 currently before getting to the end-June and July lows near 0.6600.
As for key risk events coming up, the RBA will be one to watch next week as traders are starting to hop on the fence on what policymakers will deliver on Tuesday.
