Current trend

Amid the stabilization of the US dollar, the pair AUD/USD is correcting at around 0.6577.

Late last week, the Bank of Australia released its quarterly monetary policy statement, which focused on the problem of high inflation. Officials have noted a slowdown in consumer food price increases in recent months, but rising rents continue to put significant pressure on households. The services sector is also recovering more slowly than experts predicted, which is confirmed by the report on business activity, where in July the indicator dropped to 47.9 points from 50.3 points earlier. Against this background, the RBA officials updated their forecasts for the national economy: in their opinion, Gross Domestic Product (GDP) at the end of this year will reach 0.9%, while Core CPI, as well as Unemployment, will be kept at 3.9%, preventing quotes of the Australian dollar significantly recover positions.

As for the dynamics of the US dollar, it has not changed much since last week, having only slightly dropped to the level of 101.800 in the USD Index. Investors evaluate Friday's report on the US labor market, which recorded an increase of about 187.0 thousand new jobs outside the agricultural sector, which turned out to be lower than the expected 200.0 thousand, while employment in the private non-farm sector amounted to 172.0 thousand against 128.0 thousand earlier, also being below preliminary estimates of 179.0 thousand. At the same time, the Average Hourly Earnings corrected by the previous 0.4% MoM, contrary to forecasts of a slowdown in the indicator to 0.3%, and the Unemployment Rate fell to a new record low of 3.5% in July. The US currency reacted to the publication of statistics with a moderate decrease, after which, however, it managed to restore its positions and win back most of the losses.

Support and resistance

On the daily chart, the price is trading within the Expanding Formation pattern with dynamic boundaries of 0.6990–0.6410, the implementation of which continues in a downtrend.

Technical indicators maintain a steady sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram, having moved into the sell zone, forms new descending bars.

Support levels: 0.6530, 0.6384.

Resistance levels: 0.6620, 0.6770.

Trading tips

Short positions can be opened after a reversal and continuation of the global decline in the asset, as well as fixing the price below the support level of 0.6530 with the target of 0.6384. Stop-loss — 0.6600. Implementation time: 7 days and more.

Long positions can be opened after a reversal and continued corrective growth of the asset, as well as consolidation of the price above the resistance level of 0.6620 with the target of 0.6770. Stop-loss — 0.6580.