Global macro overview for 08/08/2017:

The AIG Construction Index from Australia has hit a record high in July. The index is a survey of about 120 construction companies which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. The recent level of 60.5 points ( the previous figure was 56.0 points) was the highest number since 2005, which was also at a record high on a quarterly basis (57.7 points) and six-month basis (54.9 points), suggesting that the construction companies are at their prime level of performance. The AIG notes that "the further upturn in industry conditions reflected expanding activity across all four major construction sectors" and "government infrastructure spending is starting to influence the data, pushing up the engineering construction sector (+6.9 to 57.5 points)". Other gains were noticed in non-residential approvals (up 27% in June), helping push up the commercial construction sector (+9.8 to 64.3 points)". The weakest sector in the last year has been apartments, with approvals peaking late last year, but the sector recovered in July to 52.6 points. Moreover, the AIG noted, that new orders, employment, and wages increased strongly, which might indicate, that the construction sector will help lift wage growth in coming quarters. This, in turn, will influence the Reserve Bank of Australia, as the inflationary pressures will increase as well. All in all, another interest rate hike by RBA seems to be investable this year and will strengthen AUD across the board.

Let's now take a look at the AUD/USD technical picture at the H4 timeframe. The market is still trading inside of a channel that looks like a bullish flag pattern, so as long as the level of 0.7874 is not clearly violated, the outlook remains bullish. The oversold market conditions support the view.