AUD/USD has been impulsive and non-volatile under recent bearish pressure which pushed the price below 0.70 with a daily close again. the pair is going through corrections amid extreme volatility as traders are betting on a rate cut of at least 25 basis points at the Fed's policy meeting slated for July 30-31.

AUD fell last week versus its American rival mainly due to the greenback's advance in light of better-than-expected flash US GDP data. US economic growth expanded 2.1% in Q2 on a quarterly basis, stronger than the forecast of 1.8%. AUD is trading under higher volatility because of the quarterly CPI data released on Wednesday. Indicating the change in the price of goods and services purchased by consumers, the CPI accounts for most of the overall inflation. Retail sales figures are also due on Friday. The CPI is expected to increase from 0.0% to 0.5% while retail sales are expected to grow from 0.1% to 0.3%. These figures will indicate the change in the total value of sales, which accounts for most of the overall economic activity. Moreover, the slowdown in China's economy spooks investors away from the Australian economy which is heavily dependent on exports of raw materials to China. There is every reason to assume that the trade conflict between China and the United States will continue for a long time, so it will force the RBA to soften monetary policy to maintain the Australian economy under unfavorable conditions.

On the other hand, the US economy is expected to slow down almost twice. Therefore, there is every reason to expect that this indicator corresponds to the real one. Earlier, data on the reduction in the number of applications for unemployment benefits and the growth of orders for durable goods contributed to USD strength. A decline in business activity in the manufacturing sector to 50 pips subdued growth. USD received a boost from stronger-than-expected US GDP for Q2. The Core Durable goods orders also beat the expectation of 0.2%, coming at 1.2%. The increase was higher than 0.7% in the consensus, but the decline in May also turned out to be deeper than initially reported. This week will be significant for USD as the Fed's policy meeting will determine its further trajectory. The FOMC Press Conference with a policy update will be highly interesting as the prediction is a rate cut of 0.25. The non-farm payrolls are expected to decrease from 224k to 160k while the unemployment rate is likely to be unchanged at 3.7%.

TECHNICAL OVERVIEW:

The price is heading towards 0.6850 support area following an impulsive bearish preceding trend. Analyzing the current price formation, the price is expected to push towards 0.6850 but certain bullish momentum is also expected as a bullish intervention is imminent after the rate cut by the Federal Reserve. So, the price could climb above 0.70 again and regain the bullish momentum in the coming days. This week is going to be crucial for understanding the upcoming definite price momentum of this pair. AUD is expected to have the upper hand if the US central bank lowers the official funds rate.