| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | SELL STOP |
| Entry Point | 0.6520 |
| Take Profit | 0.6450 |
| Stop Loss | 0.6560 |
| Key Levels | 0.6450, 0.6520, 0.6580, 0.6670 |
| Alternative scenario | |
|---|---|
| Recommendation | BUY STOP |
| Entry Point | 0.6580 |
| Take Profit | 0.6670 |
| Stop Loss | 0.6530 |
| Key Levels | 0.6450, 0.6520, 0.6580, 0.6670 |
Current trend
Amid the stable dynamics of the American dollar, the AUD/USD pair is correcting downwards, trading at 0.6554.
The Australian currency failed to receive support from macroeconomic statistics. Unemployment increased from 4.0% to 4.1%, the July manufacturing PMI amounted to 47.4 points, slightly higher than 47.2 points earlier, consolidated close to the March lows, and service PMI fell from 51.2 points to 50.8 points, reaching the year’s low of mid-February and interrupting a two-month positive trend. In addition, investors are still concerned about the likely slowdown of the Chinese economy, which traditionally puts pressure on all commodity currencies. Thus, there are currently no prerequisites for strengthening the Australian dollar.
The American dollar is at the beginning of the week around 104.00 in USDX. Yesterday, the incumbent US President, Joe Biden, addressed the nation. As a result, the gross domestic product (GDP) and the labor market data went virtually unnoticed. The Q2 economy grew by 2.8% after 1.4% earlier, and the number of initial jobless claims decreased from 245.0K to 235.0K, reducing the total claims from 1.860M to 1.851M. Probably, traders will return to the data today, when the fundamental tension weakens slightly.
Support and resistance
On the daily chart, the price is correcting, retreating from the resistance line of the Expanding formation pattern with dynamic boundaries of 0.6800–0.6300. Technical indicators have given a sell signal: fast EMA on the Alligator indicator are moving away from the signal line, expanding the range of fluctuations, and the AO histogram is decreasing in the sell zone.
Resistance levels: 0.6580, 0.6670.
Support levels: 0.6520, 0.6450.
Trading tips
Short positions may be opened after the price declines and consolidates below 0.6520, with the target at 0.6450. Stop loss is 0.6560. Implementation period: 7 days or more.
Long positions may be opened after the price grows and consolidates above 0.6580, with the target at 0.6670. Stop loss is 0.6530.
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