AUD/USD Poised for Potential Rise Amid RBA’s Cautious Stance :: InvestMacro

By RoboForex Analytical Department

The AUD/USD pair shows signs of potential resurgence 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% over the month, bolstered by high consumer price index figures that underline persistent inflationary pressures in Australia.

In July, Australian inflation was recorded at 3.5% year-over-year, slightly decelerating from June’s figures but still surpassing expectations of 3.4%. This has supported the Reserve Bank of Australia’s (RBA) decision to maintain a tight monetary policy stance. Despite the challenges in effectively curbing high inflation, the RBA has adopted a watchful rather than aggressive approach, which could yield favourable outcomes over a longer horizon.

During the last RBA meeting, discussions were held regarding a potential rate hike, though it was ultimately decided to keep rates unchanged. The RBA’s cautious approach, combined with the earlier general weakness of the US dollar, has provided a solid backdrop for the Australian dollar’s strength.

AUD/USD technical analysis

On the H4 chart, AUD/USD recently completed an upward wave to 0.6822, followed by a downward impulse to 0.6784. Currently, a corrective movement to 0.6816 is anticipated, potentially establishing the upper limits of the consolidation range. A downward exit from this range could initiate a new decline to 0.6760. A break below this level might signal the start of a new downward trend towards 0.6640, with a potential continuation to 0.6575. The MACD indicator supports this bearish scenario, with its signal line at the highs and trending downward.

On the H1 chart, the pair is forming a correction to 0.6816. Following this correction, a downward movement to 0.6764 is expected, potentially extending to 0.6757. The Stochastic oscillator, currently above 80, indicates a likely decline to 20, supporting the possibility of continued downward momentum after the correction.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.