Current trend

During the Asian session, the Australian dollar is falling to the level of 0.6545, leveling the results of the uncertain growth at the end of last week and updating local lows from August 3.

Significant pressure on the position of the instrument on Tuesday morning is exerted by statistics from China: Exports in July fell by 14.5% year on year after -12.4% last month, although analysts expected a value of -12.5%, while Imports lost 12.4% after falling by 6.8% earlier: the real dynamics turned out to be worse than forecasts by more than two times. As a result, China's trade surplus rose from 70.62 billion dollars to 80.6 billion dollars in July, well ahead of experts' preliminary estimates of 70.6 billion dollars, while the drop in trade activity correlates with the overall slowdown in the Chinese economy.

A more confident development of "bearish" dynamics in the asset is hampered by positive macroeconomic statistics from Australia. The National Australia Bank's Business Confidence in July showed an increase from 0.0 points to 2.0 points, while negative dynamics was predicted to -1.0 points. In turn, the Business Conditions index for the same period strengthened from 9.0 points to 10.0 points, contrary to preliminary estimates of 8.0 points.

On Friday, the Reserve Bank of Australia (RBA) released its quarterly monetary policy statement, in which it adjusted previous estimates for consumer prices and the economy as a whole: the forecast for Gross Domestic Product (GDP) at the end of the current year is 0.9%, next year it is 1.6%, and for 2025 it amounted to 2.3%, for core inflation the forecast is 3.9%, 3.1%, and 2.8% and for unemployment it is 3.9%, 4.4% and 4.5%, respectively. The RBA is also confident that output per capita will decline in the second half of the year as higher interest rates and rising costs of living continue to put unprecedented pressure on households and, as a result, on consumption, while in the next two years the growth rate of the global economy is likely to be well below average.

American investors are currently awaiting the publication of key macroeconomic statistics on the US Consumer Price Index, which will be presented on Thursday, August 10. Current forecasts suggest a possible acceleration in annual inflation from 3.0% to 3.3% YoY, while the Core CPI is likely to correct from 4.8% to 4.7%.

Support and resistance

On the daily chart, Bollinger Bands are steadily declining. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is going down preserving a rather stable sell signal (located below the signal line). Stochastic, having retreated from its lows, signals in favor of the possible development of corrective growth in the near future.

Resistance levels: 0.6594, 0.6622, 0.6661, 0.6700.

Support levels: 0.6550, 0.6513, 0.6450, 0.6400.

Trading tips

Short positions may be opened after a breakdown of 0.6513 with the target at 0.6400. Stop-loss — 0.6570. Implementation time: 2-3 days.

A rebound from 0.6513 followed by a breakout of 0.6550 may become a signal for opening long positions with the target at 0.6622. Stop-loss — 0.6513.