AUD/USD Price Analysis – July 31, 2023

Daily Price Outlook

The AUD/USD pair recovers from recent losses, breaking a three-day losing streak. The US GDP and Personal Consumption Expenditure data had put pressure on the Australian dollar, but positive developments in China's motivation plan provide momentum.

Market participants are eagerly awaiting the Reserve Bank of Australia's (RBA) Interest Rate Decision on Tuesday for further direction. Currently, the pair is up 0.48% for the day, trading near 0.6681.

Contrary to the market forecast of 3.1%, the Personal Consumption Expenses (PCE) Price Index for June declined to 3% from May's 3.8%. The Core PCE Price Index, a key inflation indicator for the Federal Reserve, came in at 4.1% annually, lower than the projected 4.2% and down from 4.6% in May.

Additionally, China's State Council Information Office announces that Li Chunlin, vice chairman of the National Development and Reform Commission, will hold a press conference with other representatives to announce measures to boost consumption.

This development could support the Australian Dollar (AUD), acting as a broker for China, and contribute to increased household demand amid a slow post-COVID recovery.

The AUD/USD pair's recovery is approaching the 0.6700 level, driven by stimulus hopes and overlooking mixed China PMI and Aussie inflation clues. On Monday, the pair recorded its first daily gains in four days, rebounding from three-week lows and trading slightly higher around 0.6670.

Positive cues from China's official activity statistics and Australian inflation signals are influencing the market's slightly positive sentiment and the decline of the US Dollar.

Despite China's official NBS Manufacturing PMI rising to 49.3, Non-Manufacturing PMI declined to 51.5.

Australia's TD Securities Inflation increased in July from 0.1% to 0.8% MoM, but annual statistics decreased from 5.7% in June to 5.4% in July. In contrast, Australia's Private Sector Credit in June eased to 0.2% and 5.5% on a MoM and YoY basis, respectively, down from 0.4% and 6.2% in May.

AUD/USD - Technical Analysis

The AUD/USD pair faced a brief dip below the 0.6665 level but has since shown signs of recovery, prompting a positive start to the day and signaling a potential bullish bias in the upcoming sessions. The pair is expected to aim for the 0.6780 level in the short term.

The bullish trend is supported by the positive stance of the stochastic indicator. However, it is crucial to monitor the 0.6665 level, as a break below it and sustained trading below this point could halt the anticipated rise and lead to further losses.

For today's trading, the projected range is expected to be between the support level at 0.6630 and the resistance level at 0.6750.

Overall, the outlook suggests a bullish trend for today's session, but cautious observation of key levels is essential in navigating potential market movements.