The Aussie slipped below $0.665 to hit its lowest level in three weeks as weaker-than-expected domestic inflation data fueled speculation that the Reserve Bank of Australia may pause its rate hike cycle. The information indicates that Australia’s monthly CPI slowed to 5.6% in May from 6.8% in April, the slowest increase in 13 months and below the forecast of 6.1%. Earlier in June, the Reserve Bank of Australia unexpectedly raised interest rates by 25 basis points, bringing the overall increase to 400 basis points and setting the cost of borrowing at an 11-year high of 4.1%. However, in the latest minutes of the policy meeting, the central bank noted that the decision to raise the rate in June was “well balanced”, dampening expectations of further tightening in the coming months.
AUD/USD Weekly Forecast July 3 — 7, 2023
Currency pair Australian Dollar to US Dollar AUD/USD completes the trading week near the area of 0.6623. The pair continues to move as part of the development of the fall and the long-term downward channel. Moving averages indicate a bearish trend. Prices have broken through the area between the signal lines down, which indicates pressure from sellers of the asset and a potential continuation of the fall in the value of the currency pair. At the moment, we should expect an attempt to develop a bullish correction and test the resistance area near the level of 0.6685. Then, a rebound and continued fall of AUD/USD with a potential target below the level of 0.5965 in the foreign exchange market.
An additional signal in favor of the fall of the pair on Forex will be a rebound from the upper border of the descending channel. The second signal will be a rebound from the downtrend line on the relative strength index (RSI). Cancellation of the option of falling the AUD/USD currency pair in the current trading week July 3 — 7, 2023 will be a strong growth and a breakdown of the level of 0.7045. This will indicate a breakdown of resistance and a continuation of the rise of the Australian Dollar on Forex with a potential target at the level of 0.7365. A confirmation of the development of the decline will be a breakdown of the support area and the closing of prices below the level of 0.6405.
Among the important news from Australia that may have an impact on the Australian exchange rate, it is worth highlighting: The decision of the Reserve Bank of Australia (RBA) Interest Rate Decision.
AUD/USD Weekly Forecast July 3 — 7, 2023 suggests an attempt to develop a bullish correction and test the level of 0.6685. Further, the continuation of the decline of the currency pair below the level of 0.5965. In favor of the fall of the pair in the current trading week, a test of the trend line on the relative strength index (RSI) will come out. Cancellation of the downside option will be a strong growth and a breakdown of the 0.7045 area. This will indicate a breakdown of the resistance area and continued growth of the pair with a target above 0.7365.
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