AUD Retreats from 12-Week High Amid Bullish Tone
The Australian Dollar (AUD) has retreated from its 12-week high against the US Dollar (USD), but remains in control. On Monday, the AUD/USD pair traded at 0.7164, a few pips shy of the 0.7180 peak reached last Friday.
Economists at Wells Fargo believe the Aussie will be supported by investors awaiting next week's Australian Consumer Price Index (CPI) to confirm whether inflation relief seen in June can be sustained. They forecast headline inflation to rise 1.0% in July, leading the year-over-year rate down to 3.4%, while trimmed mean inflation remains at 3.6% year over year.
The US Treasury's plan to repurchase long-term securities continues to weigh on USD bulls. Technical analysis indicates a moderate bearish correction is likely, with bears being challenged at a previous resistance area near 0.7130 (August 17-20 highs) ahead of the August 19 low just below 0.7070.