AUD/USD review on July 11, 2024
AUD/USD is showing active growth, updating the local highs of the beginning of the year and is striving to break through the level of 0.6760. This is happening against the background of the weakening of the US dollar due to the likely reduction in interest rates by the Fed in September.
On July 9, Fed Chairman Jerome Powell spoke in the Senate, stressing that the adjustment of monetary policy should take into account not only inflation. He noted a significant slowdown in the labor market in June, which increases the chances of a monetary easing by the Fed in September. Two rate adjustments are expected in 2024 of 25 basis points each.
Today, investors are waiting for inflation data from the United States, which may affect the market in the coming days. The core consumer price index is projected to remain at 0.2% on a monthly basis and 3.4% on an annual basis, while the overall index will slow from 3.3% to 3.1% and grow by 0.1% after zero change last month.
The Australian currency is under some pressure due to data on inflation expectations from the Melbourne Institute, which fell from 4.4% to 4.3%. The volume of construction permits issued in May increased from 1.9% to 5.5%, and permits for new homes — from -3.0% to 2.1%. However, the sector remains under pressure due to the high cost of borrowing from the Reserve Bank of Australia, and a significant recovery is expected only after the easing of the monetary policy of the regulator, which may not happen this year.
AUD/USD Technical analysis for today
The main forex indicators on the daily chart indicate a purchase. Bollinger bands are expanding, which indicates strong growth and a path to new highs. The MACD is rising, confirming the buy signal. Stochastic, approaching the 80 mark, signals the risks of overbought Australian dollar in the short term.
It is recommended to open long positions after the breakdown and consolidation of the pair above the level of 0.6775. The target is 0.6825. We will set the stop loss at 0.6750.
If the 0.6775 level is not broken, and the price bounces down, then we will wait for a breakdown and consolidation below the 0.6750 mark. In this scenario, we get a sell signal with a target of 0.6700. We will place the stop loss at 0.6775.