The Australian dollar rose against the US today, supported by continued gains in gold as well as pressure on the US currency as a result of speculation of a rate cut by the Federal Reserve.
In his testimony before the Senate Banking Committee, the head of the central bank stressed the existence of risks surrounding the local economy, most notably trade disputes.
President Donald Trump said China disappointed our hope after it failed to commit to agreed purchases of US agricultural products.
Government data showed Australia's inflation forecast fell by 3.2%, and the rate of household loans stabilized unchanged last month.
Investors are currently waiting for the US economy to release the Producer Price Index (PPI), a preliminary indicator of inflationary pressures, which could reflect a 0.1% growth rate unchanged from last May's reading. The growth rate was unchanged at 0.2%, unchanged from May.
In the same context, the PPI may slow growth to 1.6% from 1.8% in the previous annual reading for May, and the core annualized reading for the same index may show a slowdown in growth to 2.1% from 2.3% in May. Hours after inflation data was released last month, with the consumer price index reading released on Thursday surpassing expectations.
Otherwise, we also followed yesterday the second and last half of Federal Reserve Governor Jerome Powell's semi-annual testimony before the Senate Banking Committee, hours after he gave his first half of his testimony to the House Financial Services Committee last Wednesday, completing his half- Annual policy on monetary policy before the US Congress.
We note that Powell's testimony has reinforced market speculation that Fed monetary policy makers will cut federal funds at the Federal Open Market Committee meeting scheduled for July 30-31, Minutes of the Fed's latest meeting, which in turn supported cuts in interest rates by 25 basis points by the end of the month.
The AUDUSD is slightly bullish to approach the resistance of the descending channel, where the price is positively affected by Stochastic, but since the price is below 0.7044, our bearish outlook remains valid for the coming period as breaching this level will push the price higher Of the short term bullish correction, while the next main target for the expected bearish wave is at 0.6900.
The trading range for today is expected among the support at 0.6930 and the resistance at 0.7044.
The general trend for today is bearish.