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At the beginning of today's European trading session, AUD/USD reached a new local and 25-month low of 0.6765. The main driver of the decline in AUD/USD is the Fed's monetary policy, the most stringent (at the moment) in comparison with other major world central banks.
AUD/USD continues to decline towards the lower border of the descending channel on the daily chart, which is currently passing near the 0.6700 mark.
In view of the Fed's tendency to pursue a tighter monetary policy, in anticipation of further strengthening of the US dollar and taking into account the average daily volatility of AUD / USD 60-70 points, most likely, the target of 0.6700 can be reached within the next 1-2 trading days, especially if the RBA disappoints the markets at its July 5 meeting.
In an alternative scenario, AUD/USD will attempt a correction from the reached support level 0.6800. In this case, the first signal to open long, so far short-term, positions will be a breakdown of the local resistance level 0.6850, and a confirming one will be a breakdown of the short-term resistance level 0.6914 (EMA200 on the 1-hour chart). There is every reason to expect another interest rate hike from the RBA leadership at the meeting on Tuesday.
At the moment it is 0.85%. At the same time, there is a forecast that the RBA leaders at the meeting on Tuesday may not live up to market expectations for another rate hike or even cut it altogether, which will cause an equally strong surge in volatility, which was observed during the June meeting of the RBA (as you know, the leaders of the RBA made an unexpected decision to raise the interest rate at once by 0.50%, and not by 0.25%, as market participants expected). However, it will still be difficult to predict the dynamics of the AUD and the AUD/USD pair, since the AUD/USD pair, despite a stronger increase in the RBA interest rate, continues to decline.
Support levels: 0.6800, 0.6700, 0.6500, 0.6455, 0.6270, 0.5975, 0.5665, 0.5510
Resistance levels: 0.6850, 0.6900, 0.6914, 0.6970, 0.7000, 0.7019, 0.7037, 0.7060, 0.7120, 0.7210, 0.7265, 0.7290
Trading Recommendations
Sell Stop 0.6765. Stop Loss 0.6860. Take-Profit 0.6700, 0.6500, 0.6455, 0.6270, 0.5975, 0.5665, 0.5510
Buy Stop 0.6860. Stop Loss 0.6765. Take-Profit 0.6900, 0.6914, 0.6970, 0.7000, 0.7019, 0.7037, 0.7060, 0.7120, 0.7210, 0.7265, 0.7290
