Current trend

The AUD/USD pair has been actively growing since the beginning of the month and today reached its highest values since January around 0.6812 amid differences in monetary approaches between the US Federal Reserve and the Reserve Bank of Australia (RBA). 

Recall that last Friday, US Federal Reserve Chairman Jerome Powell confirmed that the time for monetary policy correction had already come, giving the market an unambiguous signal about the first interest rate cut in September. Now, most experts expect a threefold reduction in the cost of borrowing by the end of the year, by a total of 100 percentage points.

The RBA is unlikely to be able to take similar actions in the near future, since inflation in the country remains high: according to data published today, the weighted average consumer price index for July fell from 3.8% to 3.5% YoY with preliminary estimates of 3.4%. The slowdown in dynamics was achieved due to the correction of electricity prices, however, experts note that this became possible only due to government subsidies (without taking them into account, the indicator increased by 0.9%). Thus, statistics increase the likelihood that the Australian regulator will keep interest rates at peak levels, and the change in parameters may begin only in November or next year.

In these conditions, the continuation of the growth of the AUD/USD pair in the medium term is seen as the most likely scenario.

Support and resistance

Technically, the price has consolidated above 0.6774 (Murrey level [7/8]) and may continue to rise towards the targets of 0.6897 (Murrey level [ 1/8]) and 0.6958 (Murrey level [ 2/8]). The key mark for the "bears" is 0.6640 (Murrey level [5/8], 38.2% Fibonacci retracement, the central line of Bollinger Bands), consolidating below which will allow quotes to resume moving to the levels 0.6510 (61.8% Fibonacci retracement) and 0.6408 (Murrey level [1/8]), but such a scenario seems less likely.

Technical indicators confirm the continuation of the uptrend: Bollinger Bands are directed upwards, MACD is increasing in the positive zone, and Stochastic may leave the overbought zone, which doesn't exclude a corrective decline, but its potential is limited.

Resistance levels: 0.6897, 0.6958.

Support levels: 0.6640, 0.6510, 0.6408.

Trading tips

Long positions can be opened from 0.6815 or after a price reversal in the area of 0.6713 with targets of 0.6897, 0.6958 and stop-losses of 0.6755 and 0.6650, respectively. Implementation period: 5–7 days.