Australian Dollar Retreats from August Highs

This week, forex traders’ attention is firmly on the AUD/USD market following key news releases from Australia:

→ Tuesday: Interest rate decision. According to ForexFactory, analysts’ forecasts were confirmed as the Reserve Bank of Australia (RBA) cut the cash rate from 3.85% to 3.60%.
→ Today: Labour market statistics revealed that the unemployment rate fell from 4.3% to 4.2%.

This dynamic fundamental backdrop has driven a rich technical setup on the AUD/USD chart, where bearish sentiment currently prevails.

Technical Analysis of the AUD/USD Chart

Since last month, AUD/USD price movements have been forming a descending channel (highlighted in red), and this week’s reversal from the August high reinforces its relevance.

Key factors emphasising the market’s bearish bias include:

→ Double top pattern formed by recent highs A and B. Notably, the long upper wicks of the candlesticks reflect increasing selling pressure.
→ The August upward move, marked by purple trendlines, may represent a corrective bear flag within the dominant downtrend.
→ Bearish RSI divergence – present not only between highs A and B, but also relative to the 7 July peak.

Potential Support Levels:

→ Lower purple trendline;
→ Line Q, which divides the upper half of the channel into two quarters;
→ The 0.65 psychological level – previously defended strongly by bulls, as evidenced by the wide bullish candle on 12 August, when price surged easily (a sign of buying imbalance).

These supports collectively form a key demand zone (shaded in purple). Bears will need significant momentum to break through this area and extend the prevailing downtrend in AUD/USD through August 2025.