The AUD/USD pair is on the rise, approaching 0.6552 on Monday. This comes after the Australian dollar experienced a 3% decline against the USD in the past two weeks, mainly due to a global sell-off in risky assets and weak reports from China.
Investors are eagerly waiting for the release of crucial Australian inflation data this week, which is expected to show a slight acceleration in Q2 2024. If inflation for April-June rises by 1.0% QoQ as predicted, and annualized inflation increases to 3.8% from 3.6%, it could significantly impact the Reserve Bank of Australia’s future decisions. The data is set to be released on Wednesday.
In addition to inflation data, Australia’s macroeconomic calendar will be bustling with reports on last quarter’s retail sales, trade balance, exports and imports, and the producer price index. These reports will offer valuable insights into the economy, especially given China’s economic struggles, Australia’s major economic partner. It is crucial for Australia to stay resilient in the face of these challenges.
The likelihood of an RBA interest rate hike in August is currently estimated at 20% by the market. This uncertainty is reflected in the technical analysis of the AUD/USD pair. On the H4 chart, the market has experienced a decline to 0.6513, with a potential correction towards 0.6609 before a possible trend continuation to 0.6468 and then 0.6420. The MACD indicator supports this scenario with a downward trend.
Meanwhile, on the H1 chart, the market is consolidating around 0.6561. An upward breakout could lead to a wave towards 0.6609, while a downward breakout may result in a continuation of the wave to 0.6468. The Stochastic oscillator confirms this potential downward movement.
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