AUD/USD Forecast: Aussie loses strength after being rejected from above 0.6500

AUD/USD Current Price: 0.6475

• Inflation slowed further in July in Australia; Private Credit and CAPEX data due on Thursday.

• US Dollar hit again by weaker than expected US data; Core PCE and Jobless Claims ahead.

• The AUD/USD failed to hold above 0.6500 and lost momentum.

The AUD/USD reached two-week highs on Wednesday, boosted by a weaker US Dollar, but then pulled back, erasing all gains after failing to hold above 0.6500. The short-term bias is still to the upside but is losing momentum.

The Consumer Price Index for July was reported at 4.9%, lower than the market's predicted 5.2% and also below June's 5.4% rate. This outcome will likely be good news for the Reserve Bank of Australia (RBA) as it further reinforces the belief that there'll be no rate increase at the next session. In a separate report, there was a recorded 8.1% decline in Building Permits, a significant dip from the anticipated 0.8% growth. Nevertheless, the inflation figures combined with the drop in building approval rates didn't have a substantial negative impact on the Australian Dollar. There will be a release of data concerning Private Capital Expenditure and Price Secta on Thursday in Australia.

Data from the US again came in below expectations. According to Automatic Data Processing (ADP), private employment grew by 177,000, below the market consensus of 195,000. Q2 GDP growth was revised lower from 2.4% to 2.1%. On Thursday, the focus will be on the Federal Reserve's preferred inflation gauge, the Core Personal Consumption Expenditure Price Index. Additionally, the weekly Jobless Claims and the Chicago PMI will be released. On Friday, the official employment report will be published.

The US Dollar dropped again on Wednesday but showed signs of stabilization later. The data due on Thursday will be critical. In Wall Street, the positive mood vanished and weighed on the Aussie. Chinese data during Thursday's Asian session will also be important for market sentiment and, therefore, the AUD/USD.

AUD/USD short-term technical

The bullish momentum of AUD/USD faded above 0.6500 and pulled back. It is hovering around the 20-day Simple Moving Average (SMA). The Relative Strength Index (RSI) suggests that the upside could resume, but the area between 0.6480 and 0.6500 remains a significant barrier.

On the 4-hour chart, the AUD/USD pair displays a bullish trajectory. However, if it stays under 0.6500, the pullback might persist. The bearish revision can reach up to 0.6450, with a potential support level seen at 0.6440. If the pair dips below 0.6440, a trendline test at 0.6410 could be observed. A drop below this level will shift the short-term preference towards the US Dollar. On the flip side, should the pair stabilize above 0.6500, it stands to gain further. In this case, the first aim would be at 0.6530, followed by 0.6550. Keep an eye on the price movements to make informed decisions.

Support levels: 0.6440 0.6410 0.6380

Resistance levels: 0.6500 0.6530 0.6555