Current trend

Against rising fuel prices and a positive report from the Reserve Bank of Australia (RBA), the AUD/USD pair is rising, trading at 0.6595.

Last week, WTI Crude Oil rose 6.5%, supporting the currencies of countries whose economies depend on exports. In addition, the national regulator’s bulletin states that businesses expect price growth to slow over the past six months, with inflation expected to remain above the target range of 2.0–3.0% and monetary authorities to begin adjusting borrowing costs later this year, focusing on macroeconomic statistics. Investors are ready for it and consider lower interest rates in all leading economies, including the US and EU.

On Wednesday, Australian consumer inflation data will be published: the Q4 consumer price index slowed down from 5.4% to 4.3% and from 1.2% to 0.8% QoQ. The core rate may adjust from 5.2% to 4.4%.

On Friday, the American dollar began to fall after the personal consumption expenditures index release, which amounted to 0.2% in December, justifying forecasts: the core indicator consolidated at 2.9% YoY, lower than the forecast of 3.0% and the previous value of 3.2%. The US Federal Reserve will meet on Wednesday at 21:00 (GMT 2): the consensus forecast suggests that officials will keep the interest rate at 5.25–5.50%, however, if the officials give the market signals about a possible adjustment in borrowing costs in March, it could put pressure on the dollar.

Support and resistance

The long-term trend is upwards: in January, within the correction, the price reached the support level of 0.6538, then rose to the resistance level of 0.6608, and is now trading between them. If the upper limit of the range is overcome, the instrument will likely test 0.6675, and after overcoming the lower limit, it will decline to the area of 0.6447.

The medium-term trend is downward: the asset is correcting from zone 2 (0.6581–0.6566) to the area of key trend resistance 0.6684–0.6669, after reaching which short positions are relevant with the target at the January low of 0.6533.

Resistance levels: 0.6608, 0.6675, 0.6727.

Support levels: 0.6538, 0.6447.

Trading tips

Long positions may be opened above 0.6625 with the target at 0.6727 and stop loss around 0.6580. Implementation time: 9–12 days.

Short positions may be opened below 0.6519 with the target at 0.6447 and stop loss around 0.6550.