Current trend

During the Asian session, the AUD/USD pair adds value, remaining around 0.6742: quotes continue to be supported by inflation data, which may cause the Reserve Bank of Australia (RBA) to postpone the change in the monetary rate, especially since officials already discussed such a scenario at the last meeting in mid-June.

The Weighted Average Consumer Price Index adjusted from 3.60% to 4.00% in annual terms, exceeding analysts' forecast of 3.80%, and against this background, the RBA Council emphasized the need for more careful monitoring of macroeconomic indicators to minimize the risks of developing a negative trend. However, the latest earnings showed the domestic economy grew by just 0.1% in the first three months of the year, reflecting higher-than-expected consumer spending, including on overseas holidays, while household savings were lower. The dynamics of Retail Sales in May accelerated from 0.1% to 0.6% with a forecast of 0.2%, and the Services PMI from the Commonwealth Bank in June went from 51.0 points to 51.2 points, while analysts were expecting 50.6 points, and the trade surplus slowed down to 5.773 billion Australian dollars, confirming some experts' assumption that interest rates will be raised as early as August.

However, analysts at Westpac Banking Corp. believe that a November reduction in borrowing costs is still possible, as the regulator seeks to maximally support employment growth. According to experts, the indicator will drop to 4.10% in November, to 3.85% in March and to 3.10% by September next year, but if the negative dynamics of the Consumer Price Index continues in June and the labor market remains strong, this will act as a driver for "hawkish" rhetoric. In turn, the National Australia Bank (NAB) Business Confidence index, published today, calculated based on a survey of representatives of 350 companies and assessing current business sentiment, increased from –2.0 points to 4.0 points, and the Consumer Sentiment indicator from Westpac Banking Corp. fell from 1.7% to –1.1%, confirming the continued pressure of peak interest rates.

The market's focus remains on the publication of June data on the American labor market. In June, Nonfarm Payrolls decreased from 218.0 thousand to 206.0 thousand, better than market expectations of 190.0 thousand, and the Average Hourly Earnings — from 4.1% to 3.9% in the annual terms and from 0.4% to 0.3% on a monthly basis. On the other hand, the Unemployment Rate rose from 4.0% to 4.1%, contrary to forecasts, encouraging US Federal Reserve officials to launch a program to reduce borrowing costs: the first adjustment to the rate is expected in September.

Support and resistance

On the daily chart, the price is trying to overcome the resistance line of the Expanding Formation pattern and the ascending channel with dynamic boundaries of 0.6760–0.6570.

Technical indicators that support the buy signal are reinforcing it again: fast EMAs on the Alligator indicator are actively moving away from the signal line, expanding the range of fluctuations, and the AO histogram is increasing in the buy zone.

Support levels: 0.6700, 0.6580.

Resistance levels: 0.6760, 0.6870.

Trading tips

Long positions can be opened when the price consolidates above the resistance level of 0.6760 with the target of 0.6870. Stop-loss — 0.6700. Implementation time: 7 days and more.

Short positions can be opened after the price consolidates below the support level of 0.6700 with the target of 0.6580. Stop-loss — 0.6760.