Confluence of Dynamic and Local Support Points to Potential Buying Opportunities

Central Bank

Economic

Summary:

This zone generates interest because it aligns closely with the 200-period moving average located at 0.6855, meaning the price will encounter dynamic support as it nears this area.

BUY AUDUSD

EXP

PENDING

0.68500

Entry Price

0.70620

0.67600

0.68971 -0.00026 -0.04%

Pips

PENDING

0.67600

Exit Price

0.68500

Entry Price

0.70620

The latest data released by the Australian Bureau of Statistics (ABS) showed further signs of moderation in inflationary pressures. The Consumer Price Index (CPI) increased by 4.0% year-on-year in May, slowing down from the 4.2% recorded in April and coming in below the market forecast of 4.4%. On a monthly basis, the indicator fell by 0.7%, reversing the 0.4% advance observed the previous month and significantly exceeding expectations of a more moderate contraction of 0.3%.

On the other hand, business activity showed a gradual improvement during June. According to preliminary data from S&P Global, the Manufacturing PMI advanced to 51.2 from 50.7, remaining in expansionary territory. Likewise, the Services PMI rose to 49.9 from 48.7, while the Composite PMI rebounded to 49.8 from 48.7, reflecting a recovery in economic conditions, though still close to the threshold separating expansion from contraction.

On the geopolitical front, oil prices have posted a sharp correction over the past month, reaching their lowest level since early March this Wednesday. The drop occurred amid a partial resumption of maritime transit through the Strait of Hormuz. In fact, an Iranian military source told the Fars news agency that a limited number of vessels are being authorized to cross the strait daily in coordination with the Islamic Revolutionary Guard Corps Navy.

This factor was compounded by the U.S. Department of the Treasury's decision to grant a temporary 60-day sanctions waiver, allowing the production, marketing, and export of Iranian crude oil, petroleum derivatives, and petrochemical products. This measure has helped ease concerns over global energy supply, maintaining downward pressure on oil prices and simultaneously reducing the risks of a new rebound in inflation.

Meanwhile, markets have considerably increased expectations that the Federal Reserve could implement at least one additional 25-basis-point hike during 2026, following the hawkish tone adopted by the institution last week. Nine out of nineteen members of the monetary policy committee indicated that further rate increases might still be necessary to contain inflationary pressures. In addition, the new Fed Chair, Kevin Warsh, repeatedly emphasized the importance of preserving price stability during his post-meeting press conference, suggesting that the central bank would be in no rush to ease its monetary policy even if economic growth continues to slow down. Confluence of Dynamic and Local Support Points to Potential Buying Opportunities_1

Confluence of Dynamic and Local Support Points to Potential Buying Opportunities_1

Technical Analysis

AUDUSD is locked in a strong downward move that has offered very few upward retracements. However, it is now approaching local support at the 0.6845 level. This zone generates interest because it aligns closely with the 200-period moving average located at 0.6855, meaning the price will encounter dynamic support as it nears this area. If we see a bullish rejection from this zone, buying opportunities toward the 0.50 Fibonacci retracement level around 0.7062—where the 100-period moving average also aligns—would serve as the target for this upside correction.

Looking at the oscillators, the RSI has already descended to the 27 level, moving clearly into oversold territory. This setup is likely to attract the attention of potential buyers and trigger profit-taking from short-sellers. Furthermore, the MACD shows a bearish histogram that is not yet decreasing, indicating we could still see a final move lower before it begins to lose depth. Meanwhile, the signal lines remain deeply embedded in neutral territory, reinforcing that the potential move to the upside should be considered a corrective swing, while the primary trend remains firmly to the downside.

Trading Recommendations

Trading direction: Buy

Entry price: 0.6850

Target price: 0.7062

Stop loss: 0.6760

Validity: Jul 07, 2026 15:00:00

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Confluence of Dynamic and Local Support Points to Potential Buying Opportunities

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