Aussie bulls have their sights set on 0.8000

The AUDUSD pair has retraced to a new high at 0.7944 and looks set to reach 0.8000. The key driver for buying into the Australian currency remains the intensification of trade and economic relations between Australia and China, despite all the previous scandals and bickering. In addition, higher commodity prices boost the aussie’s exchange rate.

The Reserve Bank of Australia is scheduled to hold a regular meeting next week, at which it is likely to keep the interest rate unchanged at the current historic low of 0.10%. The RBA's post-meeting statement will be closely watched as there is every reason to believe that the regulator’s narrative will be slightly more confident and optimistic due to improved relations with China. If so, the AUD rally may well have legs.