On Tuesday, the AUD/USD slightly rose and remained below the seven month high of 0.6798 set on Monday. Forex analyst Akhtar Faruqui wrote that due to traders' expectations of different policy prospects from the central banks of Australia and the United States, the downward space for AUD/USD is limited.

Traders are waiting for the Australian July inflation data to be released on Wednesday, which may affect the policy outlook of the Reserve Bank of Australia.

The minutes of the recent meeting of the Reserve Bank of Australia show that board members unanimously believe that it is unlikely to cut interest rates in the short term. In addition, Reserve Bank of Australia Chairman Brock stated that if necessary, the Reserve Bank of Australia will not hesitate to raise interest rates again to combat inflation.

Federal Reserve Chairman Powell said at the Jackson Hole Conference on the 25th, "Now is the time to adjust policy." However, Powell did not specify when to start cutting interest rates or the possible magnitude.

According to the Chicago Mercantile Exchange's Federal Reserve Watch tool, the market fully expects the Fed to cut interest rates by at least 25 basis points at its September meeting.

The Australian dollar is currently trading around 0.6785 against the US dollar. According to foreign exchange analyst Akhtar Faruqui, the daily chart shows that the Australian dollar has fallen below the upward channel against the US dollar, indicating a weakening of bullish sentiment. However, on the 14th, the Relative Strength Index (RSI) remained below the 70 level, supporting a sustained bullish trend.

On the upward side, the initial resistance level of the Australian dollar against the US dollar is the 7-month high of 0.6798 set on July 11, followed by the lower boundary of the uptrend channel at 0.6800. Breaking through this level may lead to the 0.6940 level area near the upper boundary of the upward channel for the exchange rate test.

In the downward direction, the Australian dollar against the US dollar may know support near the 9-day moving average. If it falls below the 9-day moving average, it may weaken bullish momentum and exert downward pressure on the Australian dollar against the US dollar, causing it to retrace to around 0.6575, followed by another retracement level of 0.6470.

AUD/USD daily chart