AUD/USD Outlook: Declining Toward 0.6950 Ahead of RBA Statement

• Bulls on the AUD/USD pair pause following a two-day rise that has recently slowed.
• The US dollar declined despite worries about a recession, conflicting statistics, and geopolitical issues.
• In the charts, the price is experiencing resistance from the 30-SMA.

After a 2-day rally, the AUD/USD outlook shows a halt in bulls. The price has dropped to 0.6950 ahead of the crucial US NFP data release.

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The prevailing cautious mood ahead of the important Reserve Bank of Australia (RBA) Monetary Policy Statement (MPS) and the July US employment data may explain the pair’s most recent actions. The general US currency decline gives the purchasers some hope, though.

The RBA met market expectations by raising the benchmark rate to 1.85 percent and announcing a rate hike of 50 basis points (bps). However, following the monetary policy decision, the RBA Statement, “The central bank is not on the pre-set path in normalizing rates,” appears to have attracted the AUD/USD bears, which underlines the issue.

On the other hand, the US Initial Jobless Claims increased to 260K for the week ending on July 30 from 254K the week before, and 259K projected. Additionally, job losses decreased, German factory orders increased, and the US goods and services trade balance improved to $-79.6 billion from the previous $-84.9 billion after revisions.

Despite the contradictory data, market participants hoped for the Fed’s aggressiveness, but recession fears prevented the US currency from rising.

AUD/USD key events today

Due to concerns that the hawks are losing their edge, traders of the AUD/USD pair should wait for the RBA’s MPS before acting. Following that, it will be vital for AUD/USD traders to observe the US Nonfarm Payrolls (NFP) for July, projected to be 250K versus 372K previously, to look for precise directions.

AUD/USD technical outlook: Retesting the recently broken channel support and 30-SMA.

The 4-hour chart shows the price retesting the recently broken channel support while at the same time retesting the 30-SMA. The price is currently experiencing solid resistance and will be heading lower soon.

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Looking at the candles formed in this resistance region, we see a lot of indecision shown by the small bodies and wicks. Indecision comes before a possible reversal. The RSI is trading slightly above 50 but might start trading below soon. The next target for bears is 0.68892.

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