Current trend

The AUD/USD pair quotes are held in the area of 0.6515. The day before, the instrument tried to demonstrate negative dynamics and even updated the November lows at one point, but then the "bulls" managed to regain their positions as the markets stabilized after the publication of a weak report on the US labor market last Friday.

Nonfarm Payrolls fell from 179.0 thousand to 114.0 thousand, which was significantly worse than the forecast of 175.0 thousand, while the Unemployment Rate suddenly increased from 4.1% to 4.3%, and Average Hourly Earnings in annual terms slowed down from 3.8% to 3.6% against expectations of 3.7%. Weak labor market dynamics have increased pressure on the US Federal Reserve's stance on the issue of imminent monetary easing: the probability of a reduction in borrowing costs in September has now increased to 80.0%, but analysts also expect the figure to be adjusted by more than 25 basis points, or the regulator will cut it again in November.

Meanwhile, macroeconomic statistics from Australia, presented the day before, reflected a decline in the Commonwealth Bank Services PMI in July from 50.8 points to 50.4 points with neutral forecasts, and inflation data from TD Securities indicated a slowdown in dynamics from 3.2% to 2.8%, while in monthly terms the indicator slightly accelerated from 0.3% to 0.4%. In turn, the US S&P Global Services PMI fell from 56.0 points to 55.0 points, while no changes were expected.

Investors are focused on the results of the Reserve Bank of Australia (RBA) meeting today, which as expected left the interest rate unchanged at 4.35%, noting that core inflation remains too high and officials expect it will take some time before the CPI is sustainably held within the 2.0-3.0% target range. The RBA raised interest rates 13 times in the 18-month period to November last year to prevent consumer prices from accelerating amid high government spending during the coronavirus pandemic, as well as supply disruptions and soaring energy costs. These adjustments put pressure on households, with monthly loan payments increasing by more than 250.0 dollars for every 100.0 thousand dollars borrowed.

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 ultra-short term. MACD indicator tries to reverse to growth and to form a new buy signal (the histogram is about to consolidate above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought instrument in the ultra-short term.

Resistance levels: 0.6523, 0.6540, 0.6568, 0.6600.

Support levels: 0.6500, 0.6480, 0.6456, 0.6420.

Trading tips

Short positions may be opened after a breakdown of 0.6500 with the target at 0.6456. Stop-loss — 0.6523. Implementation time: 1-2 days.

A rebound from 0.6500 as from support followed by a breakout of 0.6540 may become a signal for opening new long positions with the target at 0.6600. Stop-loss — 0.6500.