Yesterday the AUD/USD currency pair made an attempt to exit the rectangle upwards. The breakthrough turned out to be false. However, the view on the Australian currency relative to the U.S. dollar remains positive. A move up out of the pattern could increase the upward momentum.
Australian central bank governor Philip Lowe gave his comments on the regulator's recent actions. He spoke a week after the RBA board left the rate unchanged at 4.1%. The regulator has signaled that higher borrowing levels may be required in the future. Lowe reiterated this stance in his address today. He also added that he recognizes that the process of tightening monetary policy has been rather slow.
Economists polled by Bloomberg expect two more rate hikes by the RBA to 4.6% this year. Investors anticipate at least one more increase in October.
Thus, a future rate hike is still the main scenario for the Australian economy.
On the other hand, the U.S. regulator is also going to raise the rate further. However, one can assume that inflation in the U.S. has been taken under control.
The upcoming U.S. consumer inflation data for June is now under scrutiny. Its publication is scheduled for today. Overall inflation is expected to have fallen last month due to lower gasoline prices. However, the core consumer price index is expected to remain unchanged.
Inflation data will largely determine the future course of the U.S. Federal Reserve policy.
Although some officials say that the end of the cycle of interest rate hikes is imminent, policy tightening will continue in the near future, according to most market participants' forecasts.
This week, market participants will also focus on comments from other Fed officials, including Neel Kashkari, President of the Federal Reserve Bank of Minneapolis.
According to technical analysis, the AUD/USD currency pair made an attempt to break out of the consolidation range. Despite the fact that the attempt was unsuccessful, the Australian dollar's uptrend is likely to continue. Today's inflation data will be the driver.
The resistance near the price of 0.680 is the growth target. A stop-loss could be placed upon a breakdown of the current rectangle, which matches the level of 0.659.
AUDUSD growth:
Take profit – 0,680
Stop-loss – 0,659
This content is for informational purposes only and is not intended to be investing advice.
