The AUD/USD pair is currently on an upward trend, approaching the 0.6552 mark on Monday. This comes after the Australian dollar experienced a 3% fall in the past two weeks, triggered by a global sell-off in risky assets and weak reports from China. Investors are eagerly awaiting the release of Australian inflation data this week, which is expected to have a significant impact on the future actions of the Reserve Bank of Australia.
The upcoming release of Australia’s inflation statistics for Q2 2024 is highly anticipated. It is speculated that inflation may have slightly accelerated during this period, with a possible 1.0% QoQ increase in April-June. Additionally, on an annualized basis, inflation could rise to 3.8% from the previous 3.6%. The data is scheduled to be made public on Wednesday, contributing to an active macroeconomic calendar for Australia this week.
The release of essential reports on retail sales, trade balance, exports and imports, as well as the producer price index, will offer valuable insights into the Australian economy. With China facing economic challenges, being Australia’s primary economic partner, the strength of these data points becomes crucial. It is imperative to observe resilience in the market amidst uncertainties. Current market estimations suggest a 20% probability of an RBA interest rate hike in August.
Looking at the technical aspects of the AUD/USD pair, a wave of decline to 0.6513 has already occurred on the H4 chart. There is a possibility of correction development to the level of 0.6609 before a potential trend continuation to the level of 0.6468 and onwards to 0.6420. Technical indicators like the MACD signal a downward direction, supporting this scenario. On the H1 chart, the market is consolidating around the 0.6561 level. An upward breakout could lead to a wave towards 0.6609, while a downward breakout may result in a continuation of the trend towards 0.6468, confirmed by the Stochastic oscillator’s downward movement.
The AUD/USD pair’s movement is influenced by both fundamental drivers, such as inflation data and economic reports, as well as technical indicators signaling potential trend directions. Traders and investors should closely monitor these factors to make informed decisions in the foreign exchange market.