Current trend

The AUD/USD pair is showing weak growth, trying to correct after a predominantly "bearish" start to trading this week: quotes are testing 0.6610 for a breakout, receiving support from technical factors. In addition, investors positively assessed macroeconomic publications the day before: the National Australia Bank Business Conditions index rose from 7.0 points to 10.0 points in February, ahead of neutral forecasts, and the Business Confidence indicator slowed down from 1.0 points to 0.0 points.

In turn, the American currency on Tuesday received support from inflation statistics, which may signal in favor of continuing the wait-and-see policy of the US Federal Reserve. Core Consumer Price Index excluding Food and Energy added 0.4% monthly and 3.8% annually, which turned out to be slightly higher than expectations at the levels of 0.3% and 3.7%, respectively. The CPI accelerated from 3.1% to 3.2% on an annual basis and from 0.3% to 0.4% on a monthly basis. These data may give the monetary authorities grounds to postpone the cycle of reducing borrowing costs to the second half of the year; however, most analysts still hope that this will happen in June, since previously members of the regulator’s board have repeatedly warned that the path to reducing price pressure to the target level of 2.0% would not be linear.

Tomorrow at 14:30 (GMT 2) February statistics on the Producer Price Index will be presented in the United States: it is expected that on a monthly basis the indicator will consolidate at around 0.3%, and on an annual basis it may increase from 0.9% to 1.2%, while the Core PPI annual rate will remain at 2.0%, and the monthly rate will drop from 0.5% to 0.2%. In turn, Retail Sales could adjust from -0.8% to 0.8%, while the indicator excluding autos will rise from -0.6% to 0.5%.

Support and resistance

Bollinger Bands in D1 chart show moderate growth. The price range expands, freeing a path to new local highs for the "bulls". MACD is growing preserving a weak buy signal (located above the signal line). Stochastic maintains a confident downtrend, being approximately in the center of its area.

Resistance levels: 0.6616, 0.6638, 0.6667, 0.6700.

Support levels: 0.6600, 0.6578, 0.6551, 0.6524.

Trading tips

Long positions can be opened after a breakout of 0.6616 with the target of 0.6667. Stop-loss — 0.6590. Implementation time: 1-2 days.

A rebound from 0.6616 as from resistance, followed by a breakdown of 0.6600 may become a signal for opening of new short positions with the target at 0.6551. Stop-loss — 0.6630.