The recent release of Australian economic data has shown an increase in the consumer price index (CPI) to 3.6% year-on-year in April, up from 3.5% in March. This uptick in inflation has led to questions about the Reserve Bank of Australia’s (RBA) future interest rate decisions. However, it is unlikely that this slight increase will have a significant impact on the RBA’s interest rate plans. The central bank’s current stance is to wait and see, suggesting that no immediate changes to its policy are planned in response to the latest inflation figures.
The AUD/USD pair rose to 0.6650 following the release of the Australian economic data. Technically, on the H4 chart, the AUD/USD has completed a correction and is forming a new wave of decline towards the level of 0.6620. The formation of a consolidation range is expected once this level is reached. A downward exit from this range could lead to a further decline to 0.6580, the local target. The bearish indicator technically supports this scenario, with the MACD signal line above zero but directed downwards.
On the H1 chart, the AUD/USD is forming a decline structure to 0.6627. A potential rise to 0.6650 could occur after reaching this level. Further decline to 0.6620 is also possible, with a breakdown below this level opening the potential for a decline to 0.6608, and possibly extending the trend to 0.6580. The Stochastic oscillator also indicates a possible continuation of the downward trend, with its signal line currently above 50 but expected to drop to 20.
Despite mixed economic indicators, the rise of the Australian dollar against the USD highlights the complex dynamics affecting the currency. The RBA’s cautious stance and technical analyses of the AUD/USD pair suggest a bearish short-term outlook with potential corrective movements. It is crucial for investors and traders to closely monitor these levels and stay abreast of global economic developments to adjust their strategies accordingly.
Overall, the Australian economic data and the movements of the AUD/USD pair present a nuanced picture of the current economic situation. While inflation has increased slightly, the RBA’s stance on interest rates and technical analysis of the currency pair suggest a cautious approach from investors and traders. It is essential to keep a close eye on these developments to make informed decisions in the ever-changing financial markets.