Current trend

The AUD/USD pair is trying to overcome the resistance level of 0.6820 in anticipation of the Reserve Bank of Australia’s (RBA) decision on the interest rate tomorrow at 06:30 (GMT 2). Analysts are confident that the indicator will stay at 4.35% against stable inflation.

Earlier, officials noted that inflation consolidates above the regulator’s target level of 2.0–3.0% and may return to the range only by the end of 2025, and will reach the middle in 2026. The slowdown in the negative dynamics of the consumer price index is associated with the acceleration of indexation of employee wages, which, according to forecasts, will soon slow down, and with an excess of domestic demand, which is the main risk for the economy. Thus, since the situation has not changed in a month and a half, the RBA may continue to adhere to a restrictive policy, allowing the Australian dollar to update the highs of 0.6860 and 0.6890.

Last week, US Fed officials switched to “dovish” rhetoric for the first time in four years, cutting the cost of borrowing from 5.50% to 5.00%, which weakened the American dollar. Investors are concerned about accelerating inflation and rising unemployment but judging by the latest data, the national economy is demonstrating stability. Thus, the consumer price index remains above the regulator’s target but has a downward trend. The August value fell from 2.9% to 2.5% YoY, while the Q2 gross domestic product (GDP) increased by 3.0% YoY with a forecast of 2.8% and a previous value of 1.4%. The final figure is due on September 26, and analysts expect it to reach 3.0%. If the preliminary estimates are correct, investors will have more confidence in the so-called soft landing of the economy, which will allow the dollar to strengthen. In this regard, the growth of the AUD/USD pair may be limited by the highs of June-July 2023 around ​​​​0.6890.

Support and resistance

In the long term, the trading instrument is rising. In August, it reached the resistance level of 0.6820, corrected to 0.6650 in September but then continued to grow and is currently trying to break through the resistance level of 0.6820. After consolidation above, it may test the marks of 0.6860 and 0.6890.

The medium-term uptrend continued last week, and the price renewed the August high of 0.6823, breaking through zone 3 (0.6798–0.6783) and heading to zone 4 (0.6943–0.6928). The key trend support area is shifting to 0.6694–0.6679, and in case of a correction, long positions, with the target at last week’s high of 0.6836 are relevant.

Resistance levels: 0.6820, 0.6860, 0.6890.

Support levels: 0.6744, 0.6650, 0.6566.

Trading tips

Long positions may be opened at the level 0.6744, with the target at 0.6860 and stop loss 0.6710. Implementation period: 9–12 days.

Short positions may be opened below 0.6710, with the target at 0.6650 and stop loss 0.6740.