At the end of the week, the Aussie lost some ground against the Greenback as US Treasury yields somewhat recovered, lending the USD support. However, the pair is set to see further upside as it is expected the Federal Reserve (Fed) will tilt more dovish following soft inflation data from June. In a tough week for the USD, it was reported that the Core Consumer Price Index (CPI) from the US from June, dropped to 4.8% YoY in June, while the Core Producer Price Index (PPI) slid to 2.6% YoY in the same period. As markets seem to be taking off the table another rate hike past the July meeting, US Treasury yields declined, making the USD face severe selling pressure. On the data front, the University of Michigan (UoM) reported that its Consumer Confidence Index increased to 72.6 in July from it previous 65.5 and provided some support for the USD.

On the Aussie’s side, investors await labor market data next week, including the Employment Change and Unemployment rate figures from June to be released next Thursday. In addition, investors should keep an eye on China’s situation as it is expected that the Chinese government will announce stimulus measures to bolster the economy. Regarding the Reserve Bank of Australia (RBA), Deputy Governor Bullock was appointed as the new Governor to replace Governor Lowe, and her term is set to begin on September 18. Despite Friday’s downside movements, the AUD/USD’s outlook is bullish for the short term. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) stand strong in positive territory while the pair trades above the 20, 100, and 200-day Simple Moving Averages. Resistance Levels: 0.6900 (June high), 0.6950,0.6980. Support Levels: 0.6785, 0.6750, 0.6715 (20-day Simple Moving Average).