Current trend

The AUD/USD pair is growing to 0.6662, and the results of the Reserve Bank of Australia (RBA) meeting on monetary policy support the price.

Yesterday, the regulator’s officials kept the interest rate at 4.35%, confirming market estimates, and in subsequent comments noted that they did not rule out raising the indicator in the event of inflation increasing or maintaining it at the current value of 3.6%, which is much higher than the target of 2.0–3.0%. Consequently, the cost of borrowing may remain at its peak longer, supporting the national currency.

The American dollar is declining after the publication of contradictory macroeconomic data. The May core retail sales index was –0.1% MoM, below the forecast of 0.2%, and retail sales volumes increased by 0.1% compared to expectations of 0.3%. However, industrial production increased from 0.0% to 0.9%, while experts predicted 0.3%. Thus, against the current uncertainty, the further movement of the rate will be determined by the monetary policy of the US Fed. The next meeting of the regulator is due on July 31. According to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of keeping the interest rate at 5.50% is 91.7%. However, the possibility of its reduction in September adjusted from 56.7% to 61.7%, putting the national currency under pressure.

Support and resistance

The long-term trend is upward. The trading instrument grows within the channel of 0.6575–0.6700 from its lower border to 0.6700. After the breakout, the positive dynamics will continue to the resistance level of 0.6860 (December high). If the asset declines and breaks through the support level of 0.6575, it may reach the support level of 0.6490.

Resistance levels: 0.6700, 0.6860.

Support levels: 0.6575, 0.6490.

Trading tips

Long positions may be opened above 0.6720, with the target at 0.6860 and stop loss 0.6680. Implementation period: 9–12 days.

Short positions may be opened below 0.6570, with the target at 0.6490 and stop loss 0.6605.