We present a medium-term investment review of the AUD/USD pair.

The local negative scenario remains relevant: the position of the Australian currency is considered less stable compared to the American dollar, which may continue its corrective growth.

Early last month, the Reserve Bank of Australia (RBA) kept interest rates at 4.35% for the third time, maintaining a stable stance against inflation, which stood at 4.1% YoY in the fourth quarter, up 0.6%. In addition, the unemployment rate in January increased from 3.9% to 4.1% due to a slight increase in employment by 0.5K, with an expected increase of 26.4K. The Q4 volume of gross domestic product (GDP) adjusted from 0.3% to 0.2% and from 2.1% to 1.5% YoY, putting pressure on the Australian dollar.

The main driver of the asset’s dynamics is the American currency, which has been holding around 104.00 in USDX for more than a month amid the actions of US Federal Reserve officials, keeping interest rates around 5.25–5.50%. Experts assess the likelihood of a transition to the “dovish” rhetoric in March at only 3.0%. There is relative stability in the labor and real estate markets: new home sales in January reached the year-to-date average of 661.0K, and the total jobless claims were 1.902M, slightly higher than the February average of 1.896M.

Thus, the position of the American dollar is likely to continue, so the AUD/USD pair may continue to decline locally.

In addition to the underlying fundamental factors, the development of negative dynamics is confirmed by the readings of technical indicators: on the weekly chart, the price is moving within the next downward wave within the global downward corridor of 0.6740–0.6000.

After a reversal at the channel resistance line of 0.6770, a decline to the global channel support line of 0.6000 looks like the most likely scenario.

Let’s consider the key levels on the daily chart.

As can be seen on the chart, the asset continues to implement the global Head and shoulders reversal pattern, having broken the Neckline at 0.6450, and now, nothing stops the development of negative dynamics. If the price rises and reaches the December 28 high of 0.6840, the global downward scenario will be canceled or noticeably delayed in time, and it is better to liquidate sell positions. The target zone is around 0.6000, which coincides with the support level of the global downward channel, after reaching which it is better to take profit on open sell positions.

Let’s assess the entry levels on the four-hour chart.

The entry level for the sell positions is at 0.6440, and a local signal can be received as early as this week after breaking through the February low and consolidating below the support level.

Considering the average daily volatility of a trading instrument over the last month, which decreased to 32.4 points, movement to the target zone of 0.6000 will take approximately 49 trading sessions. However, if the volatility indicator increases, this time may reduce to 37 trading days.