AUD/USD Current Price: 0.6573
- The US Dollar weakens modestly on a quiet Monday.
- The Aussie rises marginally against the US Dollar but fails to regain key levels.
- Market participants are awaiting key US inflation data scheduled for later in the week.
- On a quiet day, the AUD/USD rose modestly due to a weaker US Dollar, but it remains below 0.6600 and continues to exhibit a bearish bias. After a three-day recovery, the pair has been unable to recover significantly and continues to move with a downside risk. Market focus is now on the release of US Consumer Price Index (CPI) data on Thursday and comments from central bankers.
Australia's markets were closed on Monday due to a bank holiday. The ANZ Jobs Advertisement data showed that job ads rose by 0.4% in July, following a revised decline of 2.7% in June (previously reported as -2.5%). The ANZ indicator continues to retreat from the highs it reached in September 2022 but remains well above the historical average.
On Tuesday, the Australian Westpac Consumer Confidence for August is scheduled to be released, along with the National Australia Bank's Business survey, which are expected to show a decline in July compared to June's figures. Additionally, China will release trade data, with Chinese exports expected to show a decline of 12.5% from a year ago, and imports projected to have contracted by 5%.
The US Dollar experienced a modest pullback against the Aussie on Monday, and the US Dollar Index finished flat, hovering around 102.00. US Treasury bonds had a mixed performance. The divergence in economic performance and expectations between the US and other economies continues to support the Greenback from a fundamental perspective. The upcoming release of US inflation figures on Thursday will be critical in shaping market sentiment for the current week.
AUD/USD short-term technical outlook
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The AUD/USD rose modestly on Monday and continued its upward trend for the third consecutive day. However, it finished far from its highest point and has not been able to recover last Wednesday's losses. The bias remains tilted towards the downside. The stabilization above 0.6535 is providing some positive signs, with technical indicators flattening on the daily chart, but the Australian Dollar is still not showing significant strength.
On the 4-hour chart, the outlook for the Aussie has improved as the price rose above the 20-Simple Moving Average (SMA). The pair could potentially rise further, with the next strong resistance level around 0.6600, followed by 0.6620. A consolidation above 0.6600 could further enhance the outlook for the Aussie. However, overall, the current recovery is viewed as a correction of the AUD/USD slide, rather than a stronger trend. A decline below 0.6560 (horizontal and 20-SMA) would clear the path for bearish pressure, exposing the next support level at 0.6540. If the price drops below; the 0.6500 would be exposed.
Support levels: 0.6560 0.6540 0.6495
Resistance levels: 0.6585 0.6620 0.6675
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