Current trend

The AUD/USD pair is falling to 0.6400 under the pressure of poor statistics from the Australian labor market.

The overall employment rate fell by 14.6K instead of the expected growth of 15.0K, while the full employment adjusted to –24.2K, and the unemployment rate reached 3.7%. These data confirm the position of the Reserve Bank of Australia (RBA): the steps taken to tighten monetary policy have been effective, and the national labor market is cooling down. Also, on August 15, the minutes of the last meeting of the regulator were published, according to which officials expect a further slowdown in inflation but do not exclude that additional adjustments to the parameters may be required. Investors took the report negatively, and the pair AUD/USD broke through the support level of 0.6480. On Wednesday at 01:00 (GMT 2), preliminary August data on business activity will be presented: manufacturing PMI, the indicator may rise from 49.6 points to 50.1 points, and services PMI, it is likely to remain at the same level of 47.9 points, not allowing the national currency to recover positions.

The US dollar is strengthening against positive macroeconomic statistics: thus, the volume of construction of new homes in July increased by 3.9%, exceeding the forecast of 2.7% and the previous value of –11.7%, the indicator of industrial production increased by 1.0% MoM, which is more than expected 0.3% and –0.8% earlier, and August Federal Reserve Bank (FRB) of Philadelphia Manufacturing PMI rose to 12.0 points against –13.5 points earlier, although experts expected for a correction of –10.0 points.

Most likely, the country will be able to avoid a recession this year, which will support the US dollar, and against this background, the AUD/USD pair will continue to decline.

Support and resistance

The trading instrument is moving within a long-term downtrend, breaking the support level of 0.6480 last week. The next target is 0.6285, and new short positions may be opened on correction from the strong resistance levels of 0.6500 and 0.6650. The RSI indicator is approaching the oversold zone, and in the medium term, a corrective model may develop.

The medium-term trend is downward: last week, the quotes reached the target zone 3 (0.6384–0.6367) but failed to break through it, as a result of which an upward correction to the resistance area of 0.6551–0.6534 may begin, from where it is worth opening short positions with the target at the low of the last week at 0.6370.

Resistance levels: 0.6500, 0.6650.

Support levels: 0.6285, 0.6200.

Trading tips

Short positions may be opened from 0.6500 with the target at 0.6285 and stop loss around 0.6560. Implementation period: 9–12 days.

Long positions may be opened above 0.6560 with the target at 0.6650 and stop loss around 0.6520.