The Australian Dollar (AUD) saw a modest rise driven by positive developments in Australia’s Westpac Consumer Confidence Index and a hawkish stance from the Reserve Bank of Australia (RBA). However, cautious sentiment prevails ahead of upcoming Australian inflation data.
According to reports, the RBA Governor Michele Bullock indicated that the Board discussed potential rate hikes, dismissing immediate prospects of rate cuts, as reported by ABC News. This stance has led markets to scale back expectations for any RBA rate cuts until April next year.
Meanwhile, the US Dollar exhibited weakness ahead of critical US economic data scheduled later this week. Markets are anticipating the revised US Gross Domestic Product (GDP) for Q1 on Thursday, followed by the Personal Consumption Expenditure (PCE) Price Index on Friday.
In global news, Chinese Premier Li Qiang expressed confidence in China’s ability to meet its annual growth target of around 5%, cautioning against economic decoupling and protectionism which could escalate global operational costs. Given Australia’s close economic ties with China, any shifts in the Chinese economy could impact the Australian market.
Additionally, the People’s Bank of China injected 300 billion Yuan via seven-day reverse repos, maintaining the reverse repo rate at 1.8% on Tuesday.
Domestically, Australia’s Westpac Consumer Confidence index showed a 1.7% month-over-month increase in June, marking the first rise in four months and reaching the highest level since February.
Technical analysis of the AUD/USD pair indicates a neutral bias, trading around 0.6650 and consolidating within a rectangle formation on the daily chart. The 14-day Relative Strength Index (RSI) suggests a potential bullish inclination, positioned slightly above the 50 level.
Key levels to watch include support around the 50-day Exponential Moving Average (EMA) at 0.6615 and 0.6585, the lower boundary of the rectangle. Resistance levels are expected near 0.6695, at the upper boundary of the formation and psychological level of 0.6700, with further resistance at the January high of 0.6714.
Investors are closely monitoring these developments amid ongoing global economic uncertainties and their potential impacts on currency markets, particularly concerning the AUD/USD pair’s outlook in the near term.
Related Topics:
