FxWirePro: AUD/USD extends gains on upbeat data and US dollar weakness, upside looks limited as Australia virus woes escalate

AUD/USD chart - Trading View 

Spot Analysis:

AUD/USD was trading 0.14% higher on the day at 0.7383 at around 07:00 GMT

Previous Week's High/ Low: 0.7402/ 0.7289   

Previous Session's High/ Low: 0.7381/ 0.7316

Fundamental Overview:

Australia’s Import Price Index grew well beyond 0.2% prior to 1.9% QoQ whereas Export Price Index also crossed 11.2% previous readouts with 13.2% quarterly figures for Q2 2021.

Spread of the Delta covid variant fears continue as Aussie count rises to fresh high since August 2020.

US dollar on the defensive after dovish Fed overnight. DXY was down 0.13% at 92.14 at the time of writing. 

The Fed at its latest monetary policy’s meeting left the target range for its federal rates unchanged at 0-0.25%. The assets purchasing also remained unchanged at the current pace of  $120 billion. 

Investors now await US Core Personal Consumption Expenditure (PCE), Gross Domestic Product (GDP) and Weekly Initial Jobless Claims data for further impetus.

Chatters that the Reserve Bank of Australia (RBA) will push back tapering concerns may weigh on the quote.

Technical Analysis:

- Price action is extending break above 200H MA and GMMA indicator shows bullish shift on intraday charts

- Stochs and RSI have rolled over from oversold levels and are biased higher, but RSI remains below the 50 mark

- 'Death Cross' on the daily charts limits upside. Major trend is also bearish

- Recovery lacks traction, stiff resistance is seen at 0.7425

Major Support and Resistance Levels:

Support - 0.7372 (5-DMA), Resistance - 0.7425 (21-EMA)

Summary: AUD/USD might see minor upside amid broad based U.S. dollar weakness. That said, upside looks limited and is likely to be contained below 0.7425. Decisive break above 21-EMA could change near-term dynamics.