The recent release of Australian economic data has had a notable impact on the AUD/USD pair, pushing it up to 0.6650. The consumer price index (CPI) in Australia accelerated to 3.6% year-on-year in April, showing a slight increase from the previous month. This rise in inflation has raised questions about the Reserve Bank of Australia’s (RBA) future interest rate decisions. Despite the uptick in inflation, experts believe that it is unlikely to have a significant impact on the RBA’s interest rate plans. The central bank is currently following a wait-and-see approach and does not anticipate cutting rates until May of next year. The recent minutes from the RBA meeting suggested that the board had considered a rate hike in May but ultimately decided to maintain a stable monetary policy.
Analyzing the technical aspects of the AUD/USD pair, on the H4 chart, a correction has been completed, and a new wave of decline towards the 0.6620 level is expected. A consolidation range could form after reaching this level, with a possible further decline to 0.6580 as the local target. The bearish indicator indicates a downward trend, with the MACD signal line above zero but directed downwards. On the H1 chart, a decline structure to 0.6627 is forming, with a potential rise to 0.6650 after reaching this level. A breakdown below 0.6620 could lead to a further decline to 0.6608, with a possible extension to 0.6580. The Stochastic oscillator supports this scenario, with the signal line expected to drop, indicating a continuation of the downward trend.
Despite mixed economic indicators, the Australian dollar has shown strength, reflecting the complex dynamics affecting the currency. The RBA’s cautious stance is believed to be a significant factor in stabilizing the AUD, even with a slight increase in inflation. Technical analyses suggest a bearish short-term outlook with possible corrective movements. It is essential for investors and traders to closely monitor these levels and stay updated on global economic developments to adjust their strategies accordingly.
Overall, the rise in the AUD/USD pair following the release of Australian economic data showcases the intricate relationship between economic indicators, interest rate decisions, and technical analysis in the forex market. It is crucial for market participants to stay informed and adapt to the ever-changing landscape to make informed trading decisions.