Technical Bias: Neutral
- AUDUSD reaches highest level in 2 months, breaking a key resistance in the process.
- China manufacturing PMI will provide the necessary direction for the AUDUSD in the Asian session.
The AUDUSD broke a key resistance test on Monday, advancing more than 1 percent as the US dollar continued to backtrack in the days following the Federal Reserve’s cautious policy statement.
The AUDUSD cleared the 0.7850 resistance, which had proven to be a key resistance test over the past month. The pair climbed to an intraday high of 0.7900, a two-month high. It would subsequently consolidate at 0.7878, advancing 88 pips. The MACD is showing upward momentum, although the 1-hour chart shows the pair approaching overbought levels. The pair is supported at 0.7677. A close above the 0.7838 level will lead to a test of 0.7901.
In economic data, the HSBC China manufacturing PMI will provide direction for the Australian dollar on Tuesday. Economists forecast another month of expansion for China’s manufacturing sector, although the rate of growth will ease slightly from February’s 50.7. A reading above 50.0 signifies expansion in manufacturing activity, whereas a reading below that level denotes contraction.