AUD/USD: downward dynamics will increase

Current trend

The AUD/USD pair trades within a downward trend in a wide downward channel. After a protracted upward correction in late June and early July, it began to decline again. In late July and early August, the instrument fell by more than 400 points, testing a new local minimum of 0.6680 in the middle of last trading week. Then the course moved to a narrow sideways consolidation near the lower border of the downward trend. The main catalyst is the growth in demand for the American currency and negative releases in Australia: last week, poor data on the main indices were released. This week, USD was supported by favorable data on the consumer price index.

At the end of the current trading week, particular attention should be paid to data on the Australian labor market and inflation expectations. A number of key releases will be published in the United States: retail sales, unemployment claims, and industrial production statistics. The data can become a catalyst for the breakdown of the level of 0.6680 and the strengthening of the downward movement.

Support and resistance

In the future, the momentum may increase, and the price will break down the lower limit of the range. In this case, it can fall to new lows 0.6570, 0.6500, and the current downward channel will change to a steeper one.

Technical indicators confirm the forecast for further decline, the volume of short MACD positions are growing sharply, and Bollinger bands are directed downwards.

Resistance levels: 0.6765, 0.6800, 0.6830, 0.6865, 0.6900, 0.7000.

Support levels: 0.6730, 0.6680, 0.6600, 0.6570, 0.6500.

Trading tips

Short positions can be opened from the current level with the targets at 0.6680, 0.6570, 0.6500 and stop loss of 0.6850.

Scenario

  • Timeframe

    Weekly

  • Recommendation

    SELL

  • Entry Point

    0.6750

  • Take Profit

    0.6570, 0.6500

  • Stop Loss

    0.6850

  • Key Levels

    0.6500, 0.6570, 0.6600, 0.6680, 0.6730, 0.6765, 0.6800, 0.6830, 0.6865, 0.6900, 0.7000