AUD/USD ends the week in decline, steadily heading towards the 0.6350 support. It is possible that the pair's decline this week will be the strongest in the last few years.
The asset strengthened the "bearish" dynamics after the "hawkish" speech of Jerome Powell on Thursday. The head of the Fed did not rule out the possibility of another rate hike this year, as, in his opinion, "the state of the economy, quite allows to continue the cycle of tightening financial conditions".
The Australian dollar is supported by rising prices for iron ore, one of Australia's main export commodities. Demand for the commodity from China is increasing, allowing the cost of the commodity to rise to 16-month highs.
The monetary policy report from the Reserve Bank of Australia was released today. Inflation is expected to remain at 4.5% through the end of the year and not fall below 3.0% in 2025.
Last Tuesday, the RBA, after a four-month pause, conducted another act of monetary restraint from 4.1% to 4.35%, but did not confirm the need for further rate hikes.
Technical analysis of AUD/USD for today
On the daily AUD/USD chart, the Bollinger Bands indicator is gradually realigning to neutral. MACD indicator is declining in the positive range, approached the zero line and may move into the negative area in the near future. The Stochastic oscillator has sharply descended to the minimum values
If we consolidate below 0.6350, we open short positions with the nearest target at 0.6300. Stop-loss is set at 0.6379.
In case of a breakout above 0.6379 we return to buying with take profit at 0.6425. Stop-loss will be placed at 0.6356.