On Thursday, AUD/USD stabilized near the 0.6547 mark and continues to form the "expanding formation" pattern with dynamic boundaries between 0.6800 and 0.6300.
Analysts are discussing possible steps by the Australian monetary authorities. Deutsche Bank points to household doubts about achieving the inflation target of 2.0–3.0%, confirmed by a survey by the Melbourne Institute, where only 15% of respondents are confident in the recovery of the consumer price index after the pandemic. Roy Morgan believes that the tax cuts that began this month could reduce the number of households experiencing mortgage stress if the labor market holds up and the RBA does not raise interest rates. The unemployment rate rose to 4.1% in June, making a rate hike less likely. However, persistent inflation may force the RBA to raise rates by 25 basis points in August, which will create additional pressure on borrowers. According to Roy Morgan, more than 1.6 million mortgage holders faced repayment problems, which is 88 thousand more than in the previous month, and the number of those who are "extremely at risk" exceeded 1.016 million people, or 20%.
Westpac Banking Corp. estimates the probability of an increase in the RBA's key rate at 30%, and a reduction is not expected until August 2025. The indices of business activity in the manufacturing sector and the service sector showed slight changes: from 47.2 to 47.4 points and from 51.2 to 50.8 points, respectively.
In the United States, similar statistics showed a decrease in the manufacturing sector from 51.6 to 49.5 points and an increase in the service sector from 55.3 to 56.0 points. This increased the composite value from 54.8 to 55.0 points, confirming the stability of the economy to the "hawkish" policy of the US Federal Reserve. A Reuters poll showed that most analysts expect a rate cut in September and December, with an 86.8% chance of an autumn adjustment.
Trading patterns indicates an "expanding formation" model with boundaries of 0.6800–0.6300 on the daily AUD/USD chart. Technical indicators recommend selling: the alligator moves have turned down, and the awesome oscillator histogram is declining in the sales area.
It is recommended to open short positions only after the price is fixed below the support of 0.6530.The highest target is 0.6450. We put the stop loss at 0.6590.
Purchases are rational after fixing the pair above the level of 0.6570 with a target of 0.6660. We will set the stop loss at 0.6510.