Current trend

Quotes of the AUD/USD pair are maintained around 0.6547, trading within the Expanding Formation pattern with dynamic boundaries of 0.6800–0.6300.

Analysts are trying to predict the further steps of the Australian monetary authorities. Thus, Deutsche Bank notes that households doubt that the inflation target of 2.0–3.0% will be achieved in the near future, which is also confirmed by the results of a survey by the Melbourne Institute, according to which only 15.0% of respondents are confident that positive dynamics of the consumer price index will return after the crisis caused by the coronavirus pandemic. Meanwhile, experts at research firm Roy Morgan believe tax cuts starting this month are likely to significantly reduce the number of Australian households experiencing mortgage stress, provided the labor market holds up and the Reserve Bank of Australia (RBA) does not return to interest rate hikes. The national Unemployment Rate rose to 4.1% in June, making an adjustment to borrowing costs less likely, but persistent inflation could be a key factor in decisions about a 25-basis-point hike at the August meeting, putting further pressure on homeowners. According to Roy Morgan statistics, more than 1.6 million mortgage holders, or 30.3% of the total, experienced late payments, an increase of 88.0 thousand from the previous month, and the number of those considered “extremely exposed to risk” (based on their share of income allocated to debt elimination) exceeded 1.016 million people, or about 20.0%, compared to 14.5% over the past decade. Mortgage stress remains high, although slightly below the peaks reached earlier in the year. Note that analysts at Westpac Banking Corp. believe that the probability of raising the RBA key rate is 30.0%, and the first reduction is possible no earlier than August 2025. In turn, the business activity indices in the manufacturing and service sectors reflected a correction from 47.2 to 47.4 points and from 51.2 to 50.8 points, respectively.

Similar statistics in the United States recorded a decrease in the Manufacturing PMI from 51.6 points to 49.5 points, and the Services PMI increased from 55.3 points to 56.0 points, which allowed the Composite PMI to increase from 54.8 points to 55.0 points, confirming the stability of the national economy to the "hawkish" policy of the US Federal Reserve. A Reuters poll found that most analysts expect borrowing costs to fall in September and December, with the likelihood of a fall adjustment currently estimated at 86.8%, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool.

Support and resistance

On the daily chart, the price is still within the Expanding Formation pattern with dynamic boundaries of 0.6800–0.6300.

Technical indicators recently reversed and issued an updated sell signal that continues to strengthen: the fast EMAs on the Alligator indicator are again below the signal line, expanding the fluctuation range, and the AO histogram is decreasing in the sell zone.

Support levels: 0.6530, 0.6450.

Resistance levels: 0.6570, 0.6660.

Trading tips

Short positions can be opened after the price consolidates below the support level of 0.6530 with the target of 0.6450. Stop-loss — 0.6590. Implementation time: 7 days and more.

Long positions can be opened when the price consolidates above the resistance level of 0.6570 with the target of 0.6660. Stop-loss — 0.6510.