The pair is showing signs of a possible revival as it trades near 0.6802, consolidating within a sideways range at its local peaks towards the end of August. The Australian dollar has appreciated by almost 4% during the month, boosted by high consumer price index figures that underline persistent inflationary pressures in Australia.
In July, Australian inflation stood at 3.5% year-on-year, a slight slowdown from June's figures but still above expectations of 3.4%. This has supported the Reserve Bank of Australia's (RBA) decision to maintain a restrictive monetary policy stance. Despite the challenges in effectively curbing high inflation, the RBA has adopted a vigilant rather than aggressive approach, which could yield favourable outcomes over a longer horizon.
A possible rate hike was discussed at the last RBA meeting, but it was ultimately decided to keep rates unchanged. The RBA's caution, combined with the previous general weakness of the US dollar, has provided a solid backdrop for the strength of the Australian dollar.
Technical analysis of the AUD/USD pair
On the H4 chart, the AUD/USD pair recently completed an ascending wave to 0.6822, followed by a descending impulse to 0.6784. Currently, a corrective move to 0.6816 is anticipated, which could set the upper boundaries of the consolidation range. A downward exit from this range could initiate a new decline to 0.6760. A break below this level could signal the start of a new downtrend towards 0.6640, with a possible continuation to 0.6575. The MACD indicator supports this bearish scenario, with its signal line at the highs and trending downwards.
On the H1 chart, the pair is forming a correction towards 0.6816. After this correction, a bearish move towards 0.6764 is expected, which could extend up to 0.6757. The Stochastic oscillator, currently above 80, indicates a probable drop towards 20, which supports the possibility of continued bearish momentum after the correction.
By RoboForex Analysis Department
Disclaimer
The forecasts contained in this document are based on the author's personal opinion. This analysis cannot be considered as trading advice. RoboForex does not assume any responsibility for trading results based on trading recommendations and reviews contained herein.
