The Australian dollar has started to climb towards 0.6552 on Monday after hitting a 12-week low. Investors are eagerly anticipating the release of Australian inflation data, which is expected to have a significant impact on the Reserve Bank of Australia’s future decisions. Over the past two weeks, the AUD/USD pair has experienced a decline of more than 3% amid a global sell-off in risky assets and disappointing reports from China.
The upcoming release of crucial price statistics will shed light on Australia’s economic performance in Q2 2024. Analysts are expecting a slight acceleration in inflation, with a projected 1.0% increase quarter on quarter and a rise to 3.8% year on year. This data is scheduled to be released on Wednesday and will be closely watched by market participants.
Market Resilience
In the midst of economic uncertainties, it is crucial for investors to remain resilient. Australia’s macroeconomic calendar for the week includes reports on last quarter’s retail sales, trade balance, exports and imports, and the producer price index. Stronger-than-expected data will be favorable for the Australian dollar, especially given China’s economic slowdown, as China is Australia’s main economic partner.
On the technical side, the AUD/USD pair is currently in a consolidation phase around the level of 0.6561 on the H1 chart. A breakout above this level could signal a potential rally towards 0.6609, while a breakdown could lead to a continuation of the downtrend towards 0.6468. The MACD indicator on the H4 chart supports a bearish bias, with the signal line trending downwards below the zero mark.
As the market awaits the release of Australian inflation data and other key economic indicators, the AUD/USD pair remains sensitive to external factors such as global market trends and China’s economic performance. Traders should closely monitor technical signals and economic developments to navigate the market effectively and capitalize on trading opportunities. The coming week is expected to be particularly eventful for the Australian dollar, with a potential for increased volatility based on the incoming data releases.