AUD/USD Price Forecast: Rising 20-day EMA backs more upside

The Australian Dollar (AUD) trades marginally lower at around 0.7164 against the US Dollar (USD) during the European trading session on Tuesday. The Aussie pair edges down as the US Dollar ticks higher due to surging United States (US) Treasury Yields amid rising oil prices due to renewed Middle East conflicts.

At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades marginally higher to near 99.50. 10-year US Treasury Yields hit a fresh 19-month high at 4.78% and come closer to the multi-year high of 4.81%.

On the domestic front, the US ISM Manufacturing PMI data for August and the JOLTS Job Openings data for July are under the spotlight, which will be published at 14:00 GMT.

In Australia, investors await the Q2 Gross Domestic Product (GDP) data, which will be released on Wednesday.

Australia growth seen slowing as RBA faces renewed hike speculation

Analysts at ING’s Asia-Pacific research team expect Australian GDP growth to slow to “1.8% YoY in 2Q,” citing “ongoing weakness in the housing sector – including declining house prices – and softer residential investment.” They note that the upcoming release will be “closely watched following the upside surprise in July inflation, which has markets pricing in a higher probability of another Reserve Bank of Australia rate hike.” However, despite the shift in market expectations, ING says it “continue[s] to lean towards the RBA remaining on hold.”

AUD/USD Technical Analysis

AUD/USD trades at 0.7164, retaining a bullish near-term bias as spot holds above the 20-period exponential moving average (EMA) at 0.7118. The pair’s position over this short-term EMA suggests underlying demand remains constructive, while the Relative Strength Index (14) at 63.09 stays in positive territory without reaching overbought conditions, hinting that buyers still have room to extend the advance.

On the downside, immediate support is located at the 20-day EMA at 0.7118, which represents the first line of defense in the event of a pullback. Looking up, the pair aims to extend the advance towards the four-year high at 0.7278.