2023 could be the most stable year for the AUDUSD currency pair. The flat trend formed in February 2023, and since our last review in May, the only thing that has happened is a slight extension of the trend due to the downward movement of the support line. At the same time this proves that gradually volatility is growing, the waves are getting bigger. This gives us a reason to believe that by the end of the year the flat trend can be completed, but these feelings may be erroneous, because both currencies are on an equal footing. The only difference is that the Australian dollar as the number one commodity and risky asset may depend on the economic situation in China, which is not developing in the best way.
Over the past 7 days, volatility was explained by past meetings of central banks. The Fed raised the rate, while the RBA left the changes for later, citing lower inflation. The USD strengthened as a result, as it was supported not only by the growth of the rate, but also by a strong GDP report.
The news background for the Australian dollar was really negative amid concerns about a weak Chinese economy, as well as disappointing reports of lower exports, decrease in the construction sector and retail sales in the country. Under these conditions, the Australian currency can only hope for positive external factors, since, according to the RBA, the rate will remain high, as well as inflation.
Next week we'll see AUD's important trade surplus report in China, business confidence in Australia, and of course US inflation, so volatility will remain high. What deals are the best to be opened today? We don't trust technical analysis indicators in terms of consolidation, and we believe that consolidation will continue for several more months. We can see that the rates have stopped declining, which confirms our words. Therefore, in the near future we are waiting for a recovery within the flat trend. Therefore, today we are opening buy trades.
