AUD/USD inching closer to 0.7500 handle ahead of US ISM PMI data

The AUD/USD pair continues to build on to its strength above 100-day SMA and has now moved within striking distance of 0.7500 psychological mark ahead of the US ISM manufacturing PMI data.

On Thursday, the pair dropped below 0.7400 handle on talks of PBOC allowing the Yuan to devalue further. The pair, however, recovered swiftly and moved back above 100-day SMA region but further upside was capped on broad US Dollar recovery led by strong Chicago PMI reading. 

On Friday, despite of weaker manufacturing PMI data from China, Australia’s largest trading partner, the pair has managed to build on to its yesterday's recovery and is being assisted by a broadly weaker US Dollar that is extending support to commodities and commodity-linked currencies - like the Aussie.

Adding to this, diminishing prospects of an interest rate-cut by RBA, at its monetary policy meeting next week, is further supporting the bullish sentiment surrounding the AUD/USD major.

Moving ahead, markets now look forward to the US ISM manufacturing data, later during NY trading session, in order to determine further direction for the pair.

Technical levels to watch

Strong bullish momentum above 0.7500 handle should pave way for retest of June closing highs resistance near 0.7600 round figure, above which the pair seems all set to extend its bullish momentum in the near-term.

On the downside, 100-day SMA, near 0.7435-30 region, now seems to act as immediate support. Failure to surpass 0.7500 psychological mark resistance, and a subsequent break below 100-day SMA support, now seems to force the pair to head back towards Brexit-led swing lows support near 0.7300 round figure mark, also coinciding with 50-day SMA region.