The downtrend continues, despite the fact that the USD itself has been significantly weakened recently due to the sharp easing of the FED's monetary policy. The slowdown in China's economy keeps investors away from the Australian economy, which is heavily dependent on exports of raw materials to China. There is every reason to assume that the trade conflict between China and the United States will continue for a long time, so it will force the RBA to soften monetary policy to maintain the Australian economy under unfavorable conditions.
The key event this week for the AUD/USD will be the publication of US GDP for the second quarter. The US economy is expected to slow down almost twice. Therefore, there is every reason to expect thatthis indicator corresponds to the real one. Earlier, data on the reduction of the number of applications for unemployment benefits and the growth of orders for durable goods contributed to the strengthening of the USD. The decrease in business activity in the manufacturing sector to 50 pips slightly limited growth.
The Australian dollar, in turn, continues to be under pressure, with an increase in the probability of a further reduction of the rate to a record low. Taking into account the speech of the head of the RBA this week, the rate reduction can be considered as a reality. Due to this, the yield of 10-year government bonds decreases, which reduces the cost of the AUD against other currencies.
In this situation, we believe that the deals on the trend will be the most effective, which is also confirmed by the MACD oscillator and other technical analysis tools.
