The AUD/USD currency pair is displaying a fluctuating pattern above the significant support level of 0.6800 during the European session. Market participants are eagerly anticipating the release of the Reserve Bank of Australia (RBA) minutes, scheduled for Tuesday at 01:30 GMT, to gain insights into the decision to maintain interest rates at 4.10%.
Meanwhile, there have been some losses in S&P500 futures in London, indicating cautiousness among investors as companies begin reporting their second-quarter results.
Following the release of the modest US Consumer Price Index (CPI) and a stable labor market, investors are now turning their attention to the monthly Retail Sales data from the United States, also set to be released on Tuesday. Expectations point to a growth of 0.5% compared to the previous release of 0.3%. The US Dollar Index (DXY) is currently stagnant below the psychological resistance level of 100.00.
The AUD/USD pair has encountered selling pressure in its attempt to surpass the horizontal resistance level established from the high of June 15, which was approximately 0.6900 on a four-hour timeframe. As a result, the Australian dollar has corrected to near the 20-period Exponential Moving Average (EMA) at 0.6816. The short-term trend has become neutral, while the long-term trend remains positive.
The Relative Strength Index (RSI) (14) has entered the range of 40.00-60.00, suggesting a loss of upward momentum. Nevertheless, the bullish bias remains intact.
Looking ahead, if there is a recovery above the intraday high of 0.6854, it could expose the AUD/USD pair to the resistance level of 0.6900, followed by the high of January 09, around 0.6950.
Alternatively, in a different scenario, a further decline below the high of July 13 at 0.6742 would push the Australian dollar towards the high of July 06, around 0.6688. If the latter level is breached, it would likely lead to a further decline towards the low of July 10, approximately at 0.6623.
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