Current trend

The AUD/USD pair is testing 0.6665 for a breakout, trying to retreat from the local lows of August 16, which were tested today. The position of the Australian currency is under pressure from macroeconomic statistics: for example, the Consumer Confidence index from the country's largest bank, Westpac Banking Corp., lost 0.5% in September after increasing by 2.8% earlier, the Business Confidence index from the National Australia Bank (NAB) fell from 1.0 points to –4.0 points in August, and the Business Conditions index fell from 6.0 points to 3.0 points.

The biggest reform in the Reserve Bank of Australia's (RBA) 63-year history could be delayed after the Liberal National Party opposition decided to oppose it. Changes recommended by a government review of the regulator's performance last year after sharp criticism of its performance and its efforts to curb inflation included the creation of a separate management board to complement the current one for monetary policy. Of the nine members voting to set the interest rate, there will still be six outside members, which the opposition says could be used by the ruling party to lobby officials friendly to the current government. Treasury Secretary Jim Chalmers also proposed amendments to the proposal to remove the government's veto over the RBA's interest rate decisions, which is only recommended for emergency situations.

In turn, the instrument was supported today by macroeconomic statistics from China: Export volumes in August increased by 8.7% after increasing by 7.0% in the previous month, while analysts expected a slowdown in the dynamics to 6.5%, Imports fell sharply from 7.2% to 0.5% with a forecast of 2.0%, and the Trade Balance surplus increased from 84.65 billion dollars to 91.02 billion dollars with an expected 83.9 billion dollars.

Tomorrow at 14:30 (GMT 2), US investors will turn their attention to inflation statistics, which, like last week's labor market report, could influence expectations regarding the expected reduction in borrowing costs by the US Federal Reserve. Forecasts suggest a slowdown in the annual growth rate of the Consumer Price Index from 2.9% to 2.6% in August, while the Core CPI is expected to remain unchanged at 3.2%.

Support and resistance

On the daily chart, Bollinger Bands are trying to reverse into the descending plane. The price range is expanding; however, it fails to catch the surge of the "bearish" sentiment at the moment. MACD is going down preserving a stable sell signal (located below the signal line). The indicator is about to test the zero line for a breakdown. Stochastic retains a steady downtrend but is located in close proximity to its lows, which indicates the risks of oversold Australian dollar in the ultra-short term.

Resistance levels: 0.6675, 0.6700, 0.6725, 0.6750.

Support levels: 0.6642, 0.6622, 0.6600, 0.6568.

Trading tips

Long positions can be opened after a breakout of 0.6675 with the target of 0.6725. Stop-loss — 0.6642. Implementation time: 1-2 days.

A rebound from 0.6675 as from resistance, followed by a breakdown of 0.6642 may become a signal for opening of short positions with the target at 0.6600. Stop-loss — 0.6675.