The Australian dollar shows negative dynamics, retreating from its local highs from June 10, updated the day before. The sharp weakening of the US currency on Wednesday was associated with a decrease in expectations regarding further interest rate hikes by the US Federal Reserve at a record pace after the publication of inflation statistics: in July, consumer prices rose by 8.5%, retreating from the June record high of 9.1%, and CPI excluding Food and Energy rose by 0.3% in monthly terms and by 5.9% in annual terms, which also turned out to be lower than the expected 0.5% MoM and 6.1% YoY.
Some pressure on the position of the Australian currency today is exerted by statistics on Consumer Inflation Expectations. The indicator published by the Melbourne Institute was revised down in August from 6.3% to 5.9%. This may also indicate that the Australian regulator will take a softer stance in the near future.
The Reserve Bank of Australia (RBA) announced the launch of a pilot project to explore the possibilities of integrating a digital version of the national currency (CBDC). In particular, the RBA’s specialists, together with experts from the Digital Finance Corporate Research Center (DFCRC), plan to study the potential of using a crypto asset and its economic benefits, as well as technological, legal and regulatory nuances during the year. According to the Deputy Governor of the RBA, Michele Bullock, the project will allow local businesses to realize their ideas with the help of new technologies. The results of the experiment will be announced in August 2023.
Bollinger Bands in D1 chart show moderate growth. The price range is expanding but it fails to conform to the surge of "bullish" activity at the moment. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic is showing similar dynamics, but is gradually approaching its highs, indicating the risks of overbought Australian dollar in the ultra-short term.
Existing long positions should be kept and new ones should be opened until technical indicators are clarified.
Resistance levels: 0.7107, 0.7150, 0.7202, 0.7250. | Support levels: 0.7050, 0.7000, 0.6950, 0.6900.