Current trend

The AUD/USD pair is strengthening to 0.6427 after the publication of ambiguous US macroeconomic statistics last week.

Thus, existing home sales in July decreased by 2.2%, reaching 4.07M against the forecast of 4.15M and the previous value of 4.16M. The August manufacturing PMI from S&P Global amounted to 47.0 points, below expectations of 49.3 points and a previous value of 49.0 points, service PMI decreased from 52.3 points to 51.0 points, below 52.3 points, resulting in a composite PMI change from 52.0 points to 50.4 points, worse than analysts’ calculations of zero dynamics. However, new home sales climbed 4.4%, well above the 0.2% forecast and the previous reading of –2.8%. Summarizing the published statistics, we can assume that the US Federal Reserve will leave the interest rate at 5.50% at the next meeting.

Investors are preparing for an increase in borrowing costs in September by the Reserve Bank of Australia (RBA). Given the high rate of inflation, which is 6.00% YoY, the figure could grow by 25 basis points to 4.35%. Today’s retail sales data for July showed an increase of 0.5%, above the forecast of 0.3%, against which the Australian dollar may begin an upward correction with the target at 0.6480.

Support and resistance

The long-term trend is downward: after reaching the support level of 0.6380 last week, the price is trying to correct upwards to the resistance level of 0.6480. If the level is held, the price will fall and renew the August low of 0.6365, and in case of its breakout, the correction will continue with the target at 0.6610.

The medium-term trend is downward: as a result of the fall in July-August, the quotes reached zone 3 (0.6384–0.6367) but could not overcome it, and therefore, in the medium term, a correctional model with the target at the trend border of 0.6551–0.6534 may develop, after which, short positions with the target at the August low of 0.6365 will become relevant.

Resistance levels: 0.6480, 0.6610.

Support levels: 0.6380, 0.6285.

Trading tips

Long positions may be opened above 0.6480 with the target at 0.6610 and stop loss around 0.6430. Implementation period: 9–12 days.

Short positions may be opened below 0.6365 with the target at 0.6280 and stop loss around 0.6402.