The AUD/USD pair shows signs of potential resurgence as it trades near 0.6802, consolidating within a sideways range at its local peaks towards the end of August. The Australian dollar has appreciated by almost 4% over the month, bolstered by high consumer price index figures that underline persistent inflationary pressures in Australia.
In July, Australian inflation was recorded at 3.5% year-over-year, slightly decelerating from June's figures but still surpassing expectations of 3.4%. This has supported the Reserve Bank of Australia's (RBA) decision to maintain a tight monetary policy stance. Despite the challenges in effectively curbing high inflation, the RBA has adopted a watchful rather than aggressive approach, which could yield favourable outcomes over a longer horizon.
During the last RBA meeting, discussions were held regarding a potential rate hike, though it was ultimately decided to keep rates unchanged. The RBA's cautious approach, combined with the earlier general weakness of the US dollar, has provided a solid backdrop for the Australian dollar's strength.
AUD/USD technical analysis
On the H4 chart, AUD/USD recently completed an upward wave to 0.6822, followed by a downward impulse to 0.6784. Currently, a corrective movement to 0.6816 is anticipated, potentially establishing the upper limits of the consolidation range. A downward exit from this range could initiate a new decline to 0.6760. A break below this level might signal the start of a new downward trend towards 0.6640, with a potential continuation to 0.6575. The MACD indicator supports this bearish scenario, with its signal line at the highs and trending downward.
On the H1 chart, the pair is forming a correction to 0.6816. Following this correction, a downward movement to 0.6764 is expected, potentially extending to 0.6757. The Stochastic oscillator, currently above 80, indicates a likely decline to 20, supporting the possibility of continued downward momentum after the correction.
Before you enter foreign exchange and stock markets, you have to remember that trading currencies and other investment products is trading in nature and always involves a considerable risk. As a result of various financial fluctuations, you may not only significantly increase your capital, but also lose it completely. Therefore, our clients have to assure RoboForex that they understand all the possible consequences of such risks, they know all the specifics, rules and regulations governing the use of investment products, including corporate events, resulting in the change of underlying assets. Client understands that there are special risks and features that affect prices, exchange rates and investment products.
Recommended Content
Editors’ Picks
EUR/USD keeps its daily gains below 1.1100 post-US PCE
The slightly bearish tone in the Greenback motivates EUR/USD to maintain its constructive bias on Friday near 1.1090 in the wake of the release of the US inflation data measured by the PCE.
GBP/USD hovers around 1.3180 on US PCE data
GBP/USD maintains the positive stance in the proxiity of 1.3200 the figure amidst the marginal pullback in the US Dollar following the publication of US inflation tracked by the PCE.
Gold extends range despite US PCE inflation data miss
Gold trades mixed on Friday, edging down to trade in the $2,510s after the release of US inflation data in the form of the US Personal Consumption Expenditure (PCE) Index for July. The precious metal started the day mildly weaker after market sentiment turned positive following the release of surprisingly upbeat data from the US.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.