Key Points
- The Aussie dollar after trading higher towards the 0.7615 against the US Dollar found sellers.
- There was a resistance trend line formed on the hourly chart of the AUDUSD pair was broken, which may not act as a support.
- Earlier today, the AiG performance of the Mfg Index was released by the Australian Industry Group.
- The index posted a solid rise from the last reading of 51.8 to 56.4 in July 2016.
Technical Analysis
The Aussie dollar recently surged higher and tested 0.7600-20 resistance area where it found sellers, and later started correcting lower. During the upside move, the AUDUSD pair broke a resistance trend line formed on the hourly chart.
The pair is currently correcting lower, and heading towards the same broken resistance trend line, which may now act as a support.
The 21 hourly simple moving average is also around the same trend line to act as a barrier for sellers.
AiG Performance of the Mfg Index
Earlier today during the Asian session, the AiG performance of the Mfg Index, which presents business conditions in the Australian manufacturing sector was released by the Australian Industry Group.
The forecast was slated for no major change in the index from the last reading of 51.8. However, the result was positive, as there was an increase from 51.8 to 56.4 in July 2016. The report added that the “Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) increased by 4.6 points to 56.4 points in July, adding momentum to last month’s positive result (results above 50 points indicate expansion, with the distance from 50 points indicating the strength of expansion). This continues a recovery in the manufacturing sector that has now been running for thirteen months, marking the longest growth phase for the sector in well over a decade“.
In short, the market sentiment is positive for the Aussie dollar, and buying dips may be considered.
