The AUDUSD currency pair hit its highest level since November at the end of last week before entering a corrective phase. The pullback may extend toward the lower boundary of the ascending channel, which will likely push prices higher again. The current dip offers a great opportunity to build long Aussie positions, as its upward momentum against the US dollar still has room to run. The next target for AUDUSD buyers might be the 0.663 level.
Today’s consumer confidence data could help halt the Australian dollar’s recent decline. According to a Westpac survey, the index rose slightly in July, accelerating from 0.5% to 0.6% and reaching 93.1 points. Westpac’s Matthew Hassan pointed to the Reserve Bank of Australia’s (RBA) unexpected decision to hold rates steady at its July 8 meeting as a factor weighing on sentiment. Despite this, surveyed consumers remain optimistic about improved economic conditions in the next year.
One of the key arguments in favor of this scenario would be improved relations between Australia and its most important trading partner, China. This week, Australian Prime Minister Anthony Albanese is on an official visit to the Asian country. Today he met with Xi Jinping. Despite their disputes, the US’s aggressive trade policies are pushing Australia and China toward closer economic cooperation.
Against this backdrop, Bank of America analysts recommend going long on AUDUSD, targeting 0.69 with a stop loss at 0.635. In the first half of 2025, the Aussie was one of the worst-performing G10 currencies, beating only the Canadian dollar. However, Bank of America expects the trend to reverse in the second half of the year. The Australian dollar is likely to find support from China’s economic recovery, while the US dollar is to remain under pressure due to Donald Trump’s policies.
As long as AUDUSD holds above the lower boundary of the ascending channel, the main scenario is still a continuation of the uptrend toward the 0.663 level.
Consider the following trading strategy:
Buy AUDUSD at the current price. Take profit – 0.663. Stop loss – 0.649.
This content is for informational purposes only and is not intended to be investing advice.
