Current trend

The AUD/USD pair shows moderate growth, recovering from an uncertain decline the day before. The instrument is testing the level of 0.6690 for a breakout, receiving some support from the macroeconomic statistics from Australia. Westpac's Consumer Confidence Index rose from 0.2% to 2.7% in July, the National Bank of Australia Business Conditions Index strengthened from 8.0 points to 9.0 points in June, and the Business Confidence Index rose from -4.0 points to 0.0 points.

At the same time, analysts evaluate the data from China, which appeared the day before and served as the main "bearish" driver for the instrument. The Consumer Price Index in June fell by 0.2%, which coincided with the data of the previous month, and in annual terms, inflation slowed to 0.0% after increasing by 0.2% in May. The Producer Price Index fell from -4.6% to -5.4%, the biggest decline since 2015. Weak inflation data increase fears about the state of the Chinese economy, which is an important trading partner in the region, as well as one of the largest consumers of industrial resources, including oil products.

Tomorrow, the focus of investors will be on the decision of the Reserve Bank of New Zealand (RBNZ) on interest rates, as well as the speech of the Governor of the Reserve Bank of Australia (RBA) Philip Lowe, who may clarify the regulator's plans for further tightening of monetary policy. In addition, statistics on consumer inflation for June will be published in the US: a slowdown in the indicator from 4.0% to 3.1% is predicted.

Support and resistance

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic rises more steadily but is rapidly approaching its highs, which reflects risks of the overbought Australian dollar in the ultra-short term.

Resistance levels: 0.6700, 0.6750, 0.6800, 0.6850.

Support levels: 0.6661, 0.6622, 0.6594, 0.6550.

Trading tips

Long positions can be opened after a breakout of 0.6700 with the target of 0.6800. Stop-loss — 0.6650. Implementation time: 2-3 days.

A rebound from 0.6700 as from resistance, followed by a breakdown of 0.6661 may become a signal for opening of new short positions with the target at 0.6580. Stop-loss — 0.6700.