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AUDUSD Long-term Trend Remains Downwards

11/21/2022 3:22 PM

After an unsuccessful attempt to consolidate above 0.6725, the AUD/USD pair is falling to 0.6500 on the back of a correction in the US dollar.

The US currency is strengthening against the backdrop of the publication of positive data on the national real estate market: the number of building permits issued in October reached 1.526M, above the forecast of 1.512M, the volume of new home construction amounted to 1.425M, which is also above the forecast of 1.410M, and sales in the secondary housing market are at 4.43M, which is higher than the forecast of 4.38M. In turn, buyers of the Australian dollar were disappointed with the publication of inflation data: the Australian consumer price index for October was at 10.6% YoY, below expectations of 10.7%, while the core consumer price index was 5.0%, confirming the forecast.

In his latest speech, Philip Lowe, head of the Reserve Bank of Australia (RBA), noted that the regulator would not raise rates too aggressively, as the European Central Bank (ECB) and the US Federal Reserve do, so as not to slow down the pace of economic recovery. The next meeting of the Australian department will take place on December 6, where officials are likely to raise interest rates by 0.5%.

The long-term trend remained downwards. Market participants held the 0.6725 level last week. As a result, the AUD/USD pair began to decline towards 0.6500 after consolidation below which the downward trend will continue to 0.6290.

The medium-term trend is up. Last week, quotes broke the target zone 3 (0.6727–0.6710), and the next target was zone 4 (0.6929–0.6909). Now, the trading instrument is correcting with the target at the key trend support 0.6597–0.6577, after reaching which new purchases can be considered with the target at the high of the last week around ​​0.6795.

Resistance levels: 0.6725, 0.6900, 0.6990. | Support levels: 0.6500, 0.6290.

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