AUD/USD Price Analysis: A Bullish Reversal Is On The Cards

• The AUD/USD pair bounces after consolidating around 0.6400, while the Dollar loses resistance.
• This week, the DXY moves sideways after five weeks of gains as investors await a trigger for further action.
• The AUD/USD pair manages to break out of the symmetrical triangle chart pattern.

The pair AUD/USD It bounces after building a base near the round 0.6400 level support in the European session. The pair manages to defend the bearish bias as the dollar loses resistance ahead of the Jackson Hole Symposium. Furthermore, investors shrugged off the deflation risks associated with the Chinese economy, as the People’s Bank of China (PBoC) cut the one-year Prime Rate (PLR) to 3.45%.

The Dollar Index (DXY) struggles to find direction after sensing a strong upside restriction near 103.50. The DXY is moving sideways this week after five weeks of gains as investors await a trigger for further action.

Meanwhile, UOB Group economists expect the RBA to have kept rates unchanged for two consecutive months and, following the data set, we believe it will keep policy unchanged at its next two meetings on September 5 and September 3. October, unless we have upward inflation surprises with the July CPI data from August 30 and the August CPI data from September 27.

The AUD/USD shows a breakout of the symmetrical triangle chart pattern formed on the hourly scale. The breakout of such a chart pattern translates into wider tick widths and strong volume. The pair is stabilizing above the 50 EMA at 0.6420 but still faces roadblocks near the 200 EMA around 0.6455.

The Relative Strength Index (RSI) (14) moves into the bullish range of 60.00-80.00, indicating that bullish momentum has been activated.

A decisive break above the Aug 16 high around 0.6480 will propel the asset towards the Aug 15 high at 0.6522, followed by the Aug 10 high at 0.6616.

In an alternate scenario, a move below the Aug 18 low at 0.6380 will un-break the triangle and expose the pair to a new 9-month low around 0.6300. A fall below this last level would expose the pair to the November 3, 2022 low at 0.6272.

AUD/USD hourly chart