The correction of the USD against the background of the technical recession in the USA was the catalyst for an upward movement in the AUD/USD pair to the resistance area of 0.6985–0.7060.
Last week, the US Fed raised the interest rate again by 75 basis points. At the press conference following the meeting, the head of the department Jerome Powell stressed that the next steps regarding changes in monetary parameters will be taken strictly depending on the incoming economic data. Investors took this as a negative signal, hinting that there may not be more such major adjustments to the indicator this year. In addition, statistics on the gross domestic product of the USA, published on July 28, recorded a decrease of 0.9% in Q2, while analysts expected growth of 0.5% despite the fact that the previous value was also negative at -1.6%. Against this background, the USD is weakening against its main global competitors.
The Reserve Bank of Australia's (RBA) interest rate decision will be published tomorrow. Analysts expect an increase of 50 basis points. If the forecast is justified, then it will be possible to assume the continuation of the growth of the AUD/USD pair and the breakout of the resistance level of 0.7060.
In turn, the consumer price index of Australia is growing following inflation around the world. Taking into account the changes in Q2, the annual value reached 6.1%, which means too much deviation from the central bank's targets. It is likely that tomorrow's interest rate hike will not be the last this year, so the volatility in trading is estimated as high.
The long-term trend is downward. At the moment, market participants are testing the key trend resistance area of 0.7060–0.6985. If it is broken out, the growth is likely to continue with a target at 0.7275. Otherwise, the pair is expected to decline and update the July lows in the area of 0.6680.
The mid–term trend changed to an upward one last week, when the key resistance in the area of 0.6901-0.6881 was broken by the bidders. Now the target for purchases is the target zone 0.7001–0.7081. The key support, from which it is worth considering buying an asset, is shifting to the levels of 0.6831–0.6811.
Resistance levels: 0.6985, 0.7060, 0.7275. | Support levels: 0.6830, 0.6680.