AUD/USD remains flat in the range of 0.6579 - 0.6805 over the past two months. Both currencies are under pressure and cannot find enough stimulus to strengthen against each other. It is especially difficult for the Australian dollar, which is a risky asset at a time when investors fear a large-scale recession and economic crisis. In turn, the USD is losing support as the cycle of rising interest rates has ended, and the economy is faced with high rates and bankruptcies of a number of banks.
This week the situation has not changed. Recent macro reports showed a zero business confidence index, a decline in retail sales in Australia, and in China, according to the latest report, the volume of imported goods fell by 7.9%, which is more than expected. Thus, the news was extremely negative for the AUD.
At the same time, the USD remains under pressure after the last Fed meeting, and the latest macroeconomic reports indicate an increase in the number of applications for unemployment benefits above forecasts. Also, the market reacted negatively to the decline in inflation, which reduces the likelihood of a further increase in the rate, but increases the likelihood of its reduction.
Technical analysis tools are multidirectional, as usually happens with a flat trend, but in the current situation, we still prefer the US dollar, given the signals of MACD, Stochastic oscillator, and doubts about the attractiveness of risky assets at the moment. The entry points can also be the mentioned levels of 0.6579 and 0.6805, the overcoming of which will indicate the end of the consolidation period.
