As a result of the meeting ended on Wednesday, the Fed leaders raised the discount rate by 0.25%, to the level of 5.50% (range 5.25% - 5.50%). Since this decision was in line with market expectations, as we suggested in our review yesterday, it has already been priced in.
Today the meeting on monetary policy will be held by the ECB, and tomorrow - by the Bank of Japan.
At the beginning of the next week (Tuesday), the Australian RB will make its decision on the interest rate. It will be published at 04:30 (GMT).
According to RBA officials, "inflation is still too high and it will be some time before it returns to the target range", although "further tightening will depend on how the economy and inflation develop."
It is expected that at the meeting on August 1, the RBA interest rate will be raised by 0.25% to 4.35%.
The Australian dollar is likely to react positively to this decision, if the accompanying statement does not contain unexpected statements, for example, about the need to take a break before further interest rate increases.
In any case, we should expect a sharp increase in volatility during the publication of this RBA decision, primarily in the quotes of the Australian dollar, including the AUD/USD pair.
From a technical point of view, it is developing a short-term upward trend, trying to gain a foothold in the zone of the bullish medium-term market, above the key support level of 0.6755.
At the same time, AUD/USD remains in the long-term bear market zone, below the key resistance level of 0.7040. Therefore, in case of a breakdown of the support level of 0.6755, it is logical to assume a further decline in the pair as part of a long-term bearish trend.
The signal for the implementation of the downside scenario may be a breakdown of the important support levels of 0.6780, 0.6770 with targets near the lower border of the downward channel on the weekly chart, which is currently passing near local lows (since April 2020) and the marks of 0.6285, 0.6200.
Support levels: 0.6780, 0.6770, 0.6755, 0.6730, 0.6700, 0.6600, 0.6565, 0.6500, 0.6455, 0.6390, 0.6285, 0.6200, 0.6170
Resistance levels: 0.6800, 0.6840, 0.6900, 0.6975, 0.7000, 0.7040, 0.7060
