Current trend

The AUD/USD pair shows a moderate decline, retreating from the local highs of June 27, updated the day before. The instrument is testing the level of 0.6650 for a breakdown, remaining under pressure from the decision of the Reserve Bank of Australia (RBA).

The regulator left the interest rate at 4.10%, although a fairly significant part of analysts expected a further increase in the value by 25 basis points. The follow-up statement emphasizes that inflation in the country remains high, although it has passed its peak, continuing the systematic movement to the target level of 2.0–3.0%, and the country's monetary authorities do not exclude the chance for further tightening of monetary policy to ensure that these targets are met. There are also risks of uncertainty regarding the global economy, which is likely to continue to recover more slowly than projected over the next two years.

The data published yesterday in Australia confirmed the trend towards further reduction of inflationary risks within the country: TD Securities Inflation in June slowed down from 0.9% to 0.1% in monthly terms and from 5.9% to 5.7% in annual terms. In addition, the S&P Global Manufacturing PMI in June fell from 48.4 points to 48.2 points instead of the expected growth to 48.6 points, confirming the continued pressure from rising borrowing costs.

Tomorrow, investors will pay attention to statistics on AiG Manufacturing PMI for May and Commonwealth Bank Services PMI for June. In addition, the June minutes of the US Federal Reserve meeting will be released on Wednesday, which again may indicate the likelihood of a return to the tightening cycle of monetary policy during the July meeting of the regulator.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD indicator is trying to reverse upwards and form a new buy signal (the histogram has to consolidate above the signal line). Stochastic is showing more active growth, signaling in favor of the development of "bullish" trend in the near future.

Resistance levels: 0.6661, 0.6700, 0.6750, 0.6800.

Support levels: 0.6628, 0.6583, 0.6520, 0.6450.

Trading tips

Short positions may be opened after a breakdown of 0.6628 with the target at 0.6520. Stop-loss — 0.6670. Implementation time: 2-3 days.

A rebound from 0.6628 as from support followed by a breakout of 0.6661 may become a signal for opening new long positions with the target at 0.6750. Stop-loss — 0.6610.