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AUDUSD is trading in both directions

8/30/2022 12:34 PM

The Australian dollar shows a slight decline after an uncertain corrective growth the day before. The AUD/USD pair is testing the level of 0.6880, retreating under the pressure of the American currency and expectations of the continuation of the "hawkish" policy of the US Federal Reserve on the issue of raising the interest rate.

Rather strong macroeconomic statistics from Australia gave moderate support for the instrument the day before. Retail Sales added 1.3% after rising 0.2% a month earlier, although analysts had expected the dynamics to accelerate to only 0.3%. Macroeconomic statistics released today showed a sharp decline in the number of Building Permits issued in July by 17.2% after a decline of 0.6% in the previous month, while analysts' forecasts assumed a value of 2.0%, and in annual terms negative dynamics accelerated from –17.2% to –25.9%.

In turn, the Reserve Bank of Australia (RBA) is preparing for further tightening of monetary policy, but the pace of interest rate increases may slow down. After three 50 basis point corrections in value, a slowdown to 25 basis points is expected in September. However, the regulator plans to bring the value to 2.10% by the end of this year and to 2.50% by mid-2023, and now the interest rate is at 1.85%.

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is narrowing from above, reflecting a sharp decline in the instrument at the end of last week. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic shows a more confident decline, but at the moment it is again approaching its lows, indicating risks of the instrument being oversold in the ultra-short term.

Resistance levels: 0.6900, 0.6950, 0.7000, 0.7050. | Support levels: 0.6839, 0.6800, 0.6750, 0.6700.

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