Australian Dollar finished the week at highs since January as markets bet on a dovish Fed

• 
  AUD/USD
  remains
  at
  highest
  level
  since
  January
  near
  0.6800.
• 
  Hot
  PPI
  data
  didn’t
  stop
  the
  pair
  in
  its
  upward
  trend.
• 
  Monetary
  policy
  divergence
  between
  RBA
  and
  Fed
  stir
  the
  pair.

The
Australian
Dollar
(AUD)
upheld
its
positive
trajectory
against
the
USD
in
Friday’s
session,
rising
by
0.30%
to
0.6780.
The
AUD
resumed
its
gains
with
market
participants
adjusting
their
stakes
on
the

Federal
Reserve
(Fed)
after
the
release
of
US
inflation
figures.
Hot
Producer
Price
Index
(PPI)
figures
form
the
US
didn’t
trigger
a
recovery
in
the
Greenback.

The
Reserve
Bank
of
Australia
(RBA)
is
poised
to
be
among
the
last
G10
nations’
central
banks
to
initiate
rate
cuts,
a
factor
that
could
extend
the
AUD’s
gains.

Daily
market
movers:
AUD
may
extend
gains
as
RBA
delays
cuts
and
markets
grow
confident
in
a
more
dovish
Fed

• On
  the
  economic
  data
  front,
  the
  Producer
  Price
  Index
  (PPI)
  for
  final
  demand
  in
  the
  US
  rose
  2.6%
  YoY
  in
  June,
  according
  to
  data
  published
  by
  the
  US
  Bureau
  of
  Labor
  Statistics
  on
  Friday.
• This
  result
  was
  higher
  than
  the
  forecasted
  2.3%,
  surpassing
  the
  previous
  2.2%
  rise
  in
  May.
  Core
  PPI
  also
  exceeded
  market
  expectations
  at
  3%.
• However,
  sentiment
  data
  from
  the
  University
  of
  Michigan
  came
  in
  below
  expectation
  at
  66.0,
  compared
  to
  the
  predicted
  68.5
  and
  the
  previous
  68.2.
• CME
  Fedwatch
  Tool
  predicts
  more
  than
  80%
  chance
  for
  25
  bps
  cut
  in
  September.
• On
  the
  other
  hand,
  speculation
  is
  growing
  that
  RBA
  might
  delay
  the
  global
  rate-cutting
  cycle
  or
  even
  raise
  interest
  rates
  again
  as
  a
  result
  of
  high
  inflation
  in
  Australia.
  This
  view
  compels
  RBA
  to
  maintain
  its
  hawkish
  stance.
• Furthermore,
  China,
  one
  of
  Australia’s
  closest
  trade
  partners,
  has
  announced
  its
  Trade
  Balance
  data
  for
  June
  showing
  a
  trade
  surplus
  of
  $99.05
  billion,
  a
  significant
  increase
  from
  the
  previous
  figure
  of
  $82.62
  billion.

Technical
analysis:
AUD/USD
maintains
highs,
signs
of
looming
correction

The

AUD/USD
maintains
a
bullish
stance,
retaining
the
heights
reached
in
January.
However,
the
Relative
Strength
Index
(RSI)
and
Moving
Average
Convergence
Divergence
(MACD)
indicate
that
they
are
nearing
overbought
terrain,
suggesting
a
possible
impending
correction.

Buyers
are
looking
to
maintain
the
0.6760-0.6780
range
and
surpass
the
0.6800
area
if
possible.
Conversely,
the
0.6670,
0.6650
and
0.6630
levels
are
set
as
support
ranges
in
case
of
a
correction.