AUD/USD Price Analysis: Gathers strength for a breakout towards 0.6700

The AUD/USD pair is showing topsy-turvy moves around 0.6660 in the early New York session. The Aussie asset has turned sideways as investors are awaiting the release of the United States ISM Manufacturing PMI data.

S&P500 is set to open on a flat note following choppy cues from US 500 futures. Overall market mood has turned quiet as investors are keeping an eye on the upcoming quarterly result season. The US Dollar Index (DXY) has extended its downside journey marginally below 103.00.

The Australian Dollar would show a power-pack action ahead of the interest rate decision by the Reserve Bank of Australia (RBA). Analysts at Bank of America (BofA) expect the RBA will keep rates unchanged at 4.1% in July due to softer monthly inflation. This gives the RBA an opportunity to wait for Q2 CPI data due on July 28th, as well as another labor force release on July 20th. But there is a potential for a 25 bps hike in August, taking the cash rate to 4.35%.

AUD/USD has delivered a breakout of Wyckoff’s Accumulation phase in which inventory is shifted from retail participants to institutional investors. The Aussie asset is consolidating for now but is expected to deliver further breakout. The 50-period Exponential Moving Average (EMA) at 0.6646 is providing support to the Aussie bulls.

Meanwhile, the Relative Strength Index (RSI) (14) has dropped into the 40.00-60.00 range, which indicates that the upside momentum has faded but the upside bias is still intact.

A decisive break above the intraday high at 0.6680 would expose the asset to June 27 high at 0.6720 followed by June 23 high at 0.6767.

On the flip side, a confident break June 29 low at 0.6595 would drag the asset toward June 02 low at 0.6565 and the round-level support at 0.6500.

AUD/USD hourly chart