The Australian dollar surged to 0.6650 after the release of the latest economic data in Australia. The consumer price index (CPI) rose to 3.6% year-on-year in April, indicating a slight uptick from the previous month. This increase in inflation has raised questions about the Reserve Bank of Australia’s (RBA) future interest rate decisions. Despite the rise in CPI, the RBA is unlikely to make significant changes to its interest rate policies. It is forecasted that interest rates will remain unchanged until at least May of the following year. The recent RBA meeting minutes suggested that the Board considered a potential rate hike in May but ultimately decided to maintain a stable monetary policy. The central bank’s current approach is one of caution, as it monitors inflation levels and economic indicators before making any changes to its policies.
On the H4 chart, the AUD/USD pair is in the process of forming a new wave of decline towards the level of 0.6620 after completing a correction. A consolidation range is expected to form once this level is reached, with a potential further decline to 0.6580 being the local target. A corrective move to 0.6626 may follow, before another decline to 0.6547. The bearish trend is supported by technical indicators, such as the MACD, which points towards a downward direction. On the H1 chart, the pair is forming a decline structure towards 0.6627, with a possible rise to 0.6650. A breakdown below the level of 0.6620 could indicate a further decline to 0.6608, with a potential extension to 0.6580. The Stochastic oscillator reinforces this bearish scenario, as it is expected to drop to 20, indicating a continuation of the downward trend.
Despite mixed economic indicators, the Australian dollar has shown resilience, reflecting the complex dynamics affecting the currency. The cautious approach of the RBA seems to have played a key role in stabilizing the AUD, even as inflation has slightly increased. Technical analyses suggest a bearish outlook in the short term, with the possibility of corrective movements. It is essential for investors and traders to closely monitor these levels and stay informed about global economic developments in order to adjust their strategies accordingly.
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