Current trend

During the Asian session, the AUD/USD pair is testing 0.6675 for a breakout amid stable macroeconomic statistics.

Thus, according to data on the state of business in Australia, in July, turnover added 1.0% after negative dynamics in the previous two months. Positive dynamics are noted in the transport, postal and warehousing industries ( 4.0%), the scientific services sector ( 3.9%), construction ( 2.3%), and wholesale trade ( 2.0%), while the retail trade (–1.6%) and media (–1.6%) sectors declined the most. Compared to July 2023, growth in all thirteen sectors of the economy was recorded, excluding the mining industry, which fell by 1.2%. Thus, the high annual increase was achieved by the electricity and gas supply sectors ( 16.8%) and professional and scientific services ( 8.4%). However, it is too early to talk about economic stabilization, and it is necessary to confirm this trend in subsequent periods.

A more confident increase in the quotes at the beginning of the week is hampered by data from China. The consumer price index in August accelerated from 0.5% to 0.6%, while analysts expected growth to 0.7%, while the inflation growth slowed from 0.5% to 0.4% MoM against neutral forecasts. The producer price index in August accelerated its decline from –0.8% to –1.8%, worse than the market forecast of –1.4%.

The driver for the sharp decline was the US labor market data for August, as a result of which the American dollar reached 101.20 in USDX. The report confirmed the positive dynamics in the sector, although the data did not meet analysts’ forecasts. Thus, the unemployment rate fell to 4.2% from 4.3% earlier, facilitated by an increase in the number of people employed in the non-agricultural sector by 142.0K instead of 89.0K earlier. In the private nonfarm, the increase was 118.0K, higher than 74.0K earlier. Of all the sectors, a decrease was observed only in the manufacturing industry, which lost 24.0K jobs.

Support and resistance

On the daily chart, the trading instrument is correcting, having started to implement the reversal pattern Head and shoulders with the Neckline at 0.6700. Technical indicators slow down the buy signal: fast EMA on the Alligator indicator approaches the signal line, narrowing the range of fluctuations, and the AO histogram decreases in the buy zone.

Resistance levels: 0.6700, 0.6780.

Support levels: 0.6660, 0.6570.

Trading tips

Short positions may be opened after the price declines and consolidates below 0.6660, with the target at 0.6570. Stop loss is 0.6720. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 0.6700, with the target at 0.6780. Stop loss is 0.6650.