Today, we present you a mid-term investment overview of the AUD/USD pair.

After the decisions of the central banks of the world's leading economies, the situation in the financial market has changed somewhat, and the negative scenario of the movement of the trading instrument has ceased to be relevant: the downward dynamics of the US dollar in recent weeks may develop into a full-fledged trend that will contribute to the growth of the pair.

Yesterday, the Reserve Bank of Australia (RBA) kept the interest rate at 4.35% for the eighth time in a row, confirming that inflation remains the main obstacle to monetary policy easing: according to the latest report, the consumer price index (CPI) increased from 3.8% to 3.9% YoY, well above the target range of 2.0–3.0%. Regulator officials believe that federal and state support measures will slow down the negative trend in the short term, but the probability that the indicator will return to the target range by 2026 is very low. Labor productivity was able to reach only the levels of 2016, which creates uncertainty in the labor market, so the cost of borrowing is likely to continue to be maintained at a high level.

The US dollar yesterday updated its annual lows and today is trading below 100.0 points in USDX, being under pressure from the US Federal Reserve's decision to lower the interest rate by 50 basis points. Despite the fact that the reaction of the AUD/USD quotes was restrained due to the forecasts taken into account, subsequent reductions in the cost of borrowing are likely to lead to a weakening of the dollar's position. As it became clear from the speech of the head of the regulator Jerome Powell, supporting the economy remains a higher priority than slowing inflation. In addition, business activity indices were published the day before: the Manufacturing PMI fell from 47.9 points to 47.0 points, and the Services PMI – from 55.7 points to 55.4 points.

In addition to the underlying fundamental factors, the continued growth of the AUD/USD pair is confirmed by technical indicators: on the W1 chart, the price confidently holds above the descending channel with the boundaries of 0.6600–0.6100.

After moving away from the resistance line around 0.6600, which can be considered a new completion of the reverse test, the price received a full confirmation for the reversal, which started testing the level of the basic 38.2% Fibonacci retracement at 0.6860.

Key levels can be seen on the D1 chart.

As can be seen on the chart, the price is leaving the limits of the ascending channel with the boundaries of 0.6880–0.6580, trying to consolidate above the resistance line, and is preparing for a full-fledged breakout and exit upward.

Near the 0.6600 mark, which coincides with the 23.6% Fibonacci initial correction level, there is a zone of cancellation of the buy signal, in case of which the upward scenario will be canceled or significantly delayed in time, and long positions should be liquidated.

Near the 0.7300 mark, which coincides with the 61.8% Fibonacci complete correction level, there is a target zone; if it's reached, profit should be taken on open long positions.

In more detail, trade entry levels can be evaluated on the H4 chart.

The trade entry level is located at 0.6860, which coincides with the basic 38.2% Fibonacci retracement level, and the local signal was received yesterday. Technically, the first attempt to overcome this correction level has already been implemented, and therefore, buy positions can already be formed at a market price exceeding 0.6860.

Given the average daily volatility in the AUD/USD pair over the past month, which has increased and now stands at 56.5 points, the price movement to the target zone of 0.7300 may take about 48 trading sessions; however, with increased dynamics, this time may be reduced to 39 trading days.