Australian dollar bulls continue to defend US$0.6760-75 after multiple tests

July 7, 2022 - 1 month ago

The Australian dollar staged another bearish contest at the bullish foundations at US$0.6760-75 and survived the contest for the fourth consecutive challenge.

Investors are now slowly absorbing the minutes from the U.S. Federal Reserve’s most recent interest rate policy meeting that did not offer any major surprises and are now waiting to see what the U.S. Fed will reveal in July’s meeting.

Meanwhile, the minutes from the Fed’s two-day meeting last month showed that the central bank’s policymakers concluded higher interest rates could be needed to restrain what they saw as a worrying trend.

The policymakers also acknowledged that more rate hikes could weaken the economy.

The US dollar index (US DXY), which tracks the greenback against a basket of its peers, settled in New York at 106.92 after soaring to a 20-year high of 107.05.

Still to come is the main event, the U.S. jobs report, which is expected to show that the world’s largest economy added 275,000 Non-Farm Payrolls in June.

Although the timeframe from the inserted graph is monthly, based on the daily technical assessment, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator is in negative territory; however, in a prime position to reinstate a positive bias.

The Moving Average Convergence Divergence (MACD) oscillator supports a weak negative bias and bullish divergence, while the ADX indicator holds a bearish trend.

As the key support holds from US$0.6760-75, overall, it should keep the bullish sentiment intact to the bullish call from US$0.6935 to US$0.7000-15. Reassess from there.

A New York close beneath the key support could reopen the region of US$0.6660-65.