On July 22nd, market analyst Akhtar Faruqui wrote that the Australian dollar fell for the sixth consecutive trading day on Monday, but the downward space may be limited as strong employment data indicates tight labor market conditions and raises concerns about the possibility of the Reserve Bank of Australia raising interest rates. Investors are looking forward to the release of the Australian Manufacturing and Services PMI data this week to measure the health of the economy.

The decline of the US dollar has provided some support for the Australian dollar against the US dollar currency pair. With increasing bets on the Fed's September rate cut and ongoing concerns about the fragility of the US labor market, the US dollar is facing challenges. According to CME Group's Fed Watch Tool, the market currently shows a 91.7% chance of the Fed cutting interest rates by 25 basis points at its September meeting, up from 90.3% a week ago.

Biden announced his withdrawal from the 2024 US presidential election and supports Harris to take over the presidency. Traders may tend to believe that if Trump wins the election, he will push for the depreciation of the US dollar. This expectation undoubtedly benefits the Australian dollar against the US dollar.

Federal Reserve Chairman Powell stated last week that three inflation data points from the United States this year have "to some extent boosted people's confidence" that inflation is moving towards achieving the Fed's goals sustainably, indicating that the Fed may soon shift towards interest rate cuts.

Market analyst Akhtar Faruqui wrote that the Australian dollar was trading around 0.6660 against the US dollar on Monday. Daily chart analysis shows that the Australian dollar is falling against the US dollar within a downward channel, indicating a bearish trend. On the 14th, the Relative Strength Index (RSI) was slightly below the 50 level, indicating the emergence of a bearish trend.

Faruqui stated that the Australian dollar may test the lower boundary of the downward channel around 0.6640 against the US dollar. If it falls below this level, it may force the exchange rate to find a pullback support level around 0.6590.

The direct resistance level of the Australian dollar against the US dollar appears at the psychological level of 0.6700, followed by the 9-day moving average (around 0.6715). If it falls below the 9-day moving average, the Australian dollar may test the upper boundary of the downward channel near 0.6740 against the US dollar.

AUD/USD daily chart