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AUDUSD Trading Instrument Returns to Decline

9/8/2022 12:44 PM

The Australian dollar shows a confident decline, returning to fall after an attempt at corrective growth the day before.

AUD/USD was moderately supported yesterday by macroeconomic data from Australia. In the second quarter, the Australian economy grew by 0.9% from 0.7% in the previous period, while forecasts assumed a value of 1.0%. The AiG Services PMI corrected from 51.7 points to 53.3 points in August, beating analysts' average expectations.

The Reserve Bank of Australia extended its monetary tightening cycle on Tuesday, raising interest rates by 50 basis points to 2.35%. The 225 basis point correction since May is the biggest since 1994. However, economists expect that the pace will start to slow down, primarily due to the fact that the high cost of borrowing is putting significant pressure on households and industrial enterprises.

The development of "bullish" dynamics for the instrument was also facilitated by the publication of a not very confident report from the US Federal Reserve (the so-called Beige Book), which showed that economic activity in the country has not changed much since the beginning of July, while expenses remain quite high, and revenues of the households are steadily declining. In addition, almost all regions of the United States also noted a significant increase in prices for food, services and utility bills.

Bollinger Bands in D1 chart demonstrate a stable decrease. The price range expands actively from below, making way for new local lows for the "bears". MACD is going down, keeping a fairly stable sell signal (located below the signal line). Stochastic shows corrective growth, retreating from its lows, which, however, weakly correlates with the real dynamics of the instrument.

Resistance levels: 0.6750, 0.6800, 0.6839, 0.6900. | Support levels: 0.6700, 0.6650, 0.6600, 0.6550.

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