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Australia’s better-than-expected reports are fueling a short-term upswing.

Can AUD bulls maintain their momentum?

Before moving on, ICYMI, yesterday’s watchlist checked out a descending channel breakout on USD/CAD’s chart. 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:

U.S. stocks flat following Friday sell-off, mixed inflation messages

BRC: UK retail sales up by 2.3%, boosted by hot summer as inflation pressure continues

AU Westpac consumer sentiment drops by 3.0% in Aug amid surging prices

NZ annual credit card spending down (-0.5%) for first time in nine months

NAB business confidence index jumped from 2 to 7 in July

Oil retreats on chance of Iran supply boost

Asia stocks wobble as focus turns to U.S. inflation data, Fed outlook

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.S. NFIB small business index at 10:00 am GMT
U.S. quarterly non-farm productivity and unit labor costs at 12:30 pm GMT
Japan’s PPI reports at 11:50 pm GMT
China’s inflation reports at 1:30 am GMT (Aug 10)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: AUD/USD

AUD/USD 1-hour Forex Chart

AUD/USD 1-hour Forex Chart

I spy with my eye an SMA crossover on the 1-hour chart!

AUD/USD showed us higher highs and higher lows last week, but it looks like buyers encountered sellers last week.

One look at the 1-hour time frame tells us that AUD/USD has responded to SMA crossovers at least FOUR times since May.

Are we looking at another short-term trend change for AUD?

The odds currently favor the bears as long as AUD/USD is still inside its descending channel.

Of course, it doesn’t help that traders are favoring the safe-haven dollar or staying away from trading altogether ahead of the U.S. CPI release.

There won’t be top-tier releases during the U.S. session so we’ll see where risk sentiment takes AUD/USD.

Make sure you’re around during China’s CPI report though!

Evidence of persistently high inflation from the two biggest economies could inspire risk aversion and drag on AUD.

On the other hand, a round of risk-taking would highlight Australia’s recent upside data surprises and maybe inspire an upside channel breakout for AUD/USD.

Watch this pair closely!