August 31, 2021

Daily U.S. Session Watchlist: AUD/USD

 Risk sentiment will probably be the name of the game today, which is why I got my eyes set on AUD/USD’s swing-term downtrend.

Can Aussie bulls extend their gains this week?

Before moving on, ICYMI, today’s Asia-London session watchlist checked out AUD/JPY testing a key area of interest ahead of data releases from China, Japan, and Australia. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Japan’s July factory output slips as COVID-19 hits car production

China’s economy under pressure as factory activity slows in Aug, services contract

ANZ Business Outlook Survey shows an ‘encouragingly robust’ early response to the new lockdown from businesses

Australia building approvals decline 8.6% on month in July

Japan’s consumer confidence worsens in Aug – govt

Asian stocks shrug off weak China PMIs, dollar slips

French inflation stronger than expected in August at 3-year high

German unemployment falls further in August as recovery continues

Dollar weakness pushes sterling to two-week high

UK households post rare net mortgage repayment in July

Upcoming Potential Catalysts on the Economic Calendar:

Eurozone’s CPI at 9:00 am GMT

Canada’s GDP at 12:30 pm GMT

U.S. Chicago PMI at 1:45 pm GMT

U.S. CB consumer confidence at 2:00 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: AUD/USD

Increased COVID-19 cases in Australia and shaky PMI numbers from China didn’t stop Aussie bulls from charging today!

Of course, it didn’t hurt that Fed’s Powell hinted last Friday that though the economy has made “clear progress,” he and his pals were in no hurry to taper their easy policies any time soon.

AUD/USD has broken above the 200 SMA on the 4-hour chart and is now trading above the .7300 psychological handle.

With no market-moving data due in the next couple of hours, we could see U.S. session traders price in their end-of-month trades and maybe some profit-taking before Friday’s U.S. NFP report.

I’ll look for AUD/USD staying above the .7300 zone to see if the anti-dollar theme would extend all the way till the Friday’s NFP release. .7400 is a good target if there’s momentum but I can also let price ride higher if traders continue to take on riskier bets in the next trading sessions.

If AUD/USD dips below .7300 though, or if end-of-month flows encourage Aussie bears to come back in the game, then we could see AUD/USD trade down to the 100 SMA near .7275 or revisit inflection points near .7250 and .7200.