Current trend

The AUD/USD pair is trying to start corrective growth, holding in the 0.6439 area.

The Australian dollar is under pressure due to the likely divergence of the monetary rhetoric of the Reserve Bank of Australia (RBA) and the US Federal Reserve soon. Australian officials may start long-term holding the interest rate at the current level, while American officials retain the possibility of a new increase in the cost of borrowing. At the August meeting, the RBA left the indicator at 4.10%, and in the minutes of the meeting published later, it was indicated that the regulator sees an opportunity to return inflation to the target range of 2.0–3.0% without further tightening of monetary policy. According to officials, the measures already taken have the desired effect, which slows down the growth of consumption, cools the labor market, and reduces inflation, which is confirmed by macroeconomic statistics. Thus, Q2 wage growth slowed from 3.7% to 3.6%, employment in July decreased by 14.6K, and unemployment increased from 3.6% to 3.7%. Thus, the agency has significant reasons to complete the “hawkish” cycle, which puts pressure on the positions of the national currency.

US Federal Reserve officials are open to further tightening of monetary policy as they remain concerned about a significant increase in core inflation and the stability of the labor market. In the minutes of the last July meeting of the regulator, which raised the interest rate to 5.50%, it was indicated that the cost of borrowing could be increased again if the current economic conditions did not change.

Against this background, the current growth of AUD/USD quotes seems to be technical and short-term.

Support and resistance

The trading instrument moves at 0.6440 but to change the downward trend, it needs to consolidate above 0.6530 (Murrey level [3/8]), supported by the middle line of Bollinger bands, and in this case, the growth targets will be 0.6652 (Murrey level [5/8]) and 0.6713 (Murrey level [6/8]). If it consolidates below 0.6408 (Murrey [1/8]), the decline may resume to 0.6347 (Murrey [0/8]) and 0.6286 (Murrey [–1/8]).

Technical indicators confirm the continuation of the downward trend: Bollinger bands are reversing downwards, and the MACD histogram is growing in the negative zone. The exit of Stochastic from the oversold zone does not exclude the development of corrective growth, which is unlikely to change the current trend.

Support and resistance

Resistance levels: 0.6530, 0.6652, 0.6713.

Support levels: 0.6408, 0.6347, 0.6286.

Trading tips

Short positions may be opened below 0.6408 with the targets at 0.6347, 0.6286 and stop loss around 0.6455. Implementation period: 5–7 days.

Long positions may be opened above 0.6530 with the targets at 0.6652, 0.6713 and stop loss around 0.6480.