AUD/USD ANALYSIS & TALKING POINTS

• How will the RBA react to the latest market re-pricing?
• Australian and US inflation information in focus.
• AUD/USD demise cross, bear flag and consumer sentiment counsel AUD weak point to come back.

AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP

The Australian greenback heads into subsequent week after a fairly muted week by way of worth volatility towards the U.S. greenback. To date, the Reserve Financial institution of Australia has been grappling with information each regionally and internationally after they determined to pause price within the earlier rate of interest meet. The most recent RBA minutes indicated that the door stays open to additional hikes if wanted and since then the RBA’s rate of interest chance desk beneath has been ramped up by cash markets to incorporate one other potential 25bps hike in 2023 – a stark change from a couple of days earlier when no such hike was on the playing cards!

RBA INTEREST RATE PROBABILITIES

Supply: Refinitiv

The week forward (see financial calendar beneath) is stacked with excessive influence occasions principally skewed in the direction of the US. From an Australian perspective, inflation for the primary quarter is anticipated to come back in decrease on each YoY and QoQ metrics which may change the above price chance chart again to no additional hikes ought to inflation are available low.

US information which has been mild of latest, appears to be like to ramp up as soon as extra this week with the US GDP and the Fed’s most popular measure of inflation (core PCE) on the calendar. It will likely be fascinating to see how these and others (sturdy items and shopper sentiment) play into the latest hawkish commentary from Fed audio system.

ECONOMIC CALENDAR

Supply: DailyFX financial calendar

Sturdy Chinese language GDP final week helped commodity costs rally as demand forecasts have been revised to the upside however since then we have now seen a deterioration as international recessionary fears achieve traction. The AUD being so closely influenced by commodity exports, decrease costs naturally pressurize the native foreign money.

TECHNICAL ANALYSIS

AUD/USD DAILY CHART

Chart ready by Warren Venketas, IG

Each day AUD/USD worth motion has been growing a bear flag sort chart sample along side the demise cross (crimson) early final week. These indicators are ominous for the Aussie greenback however may discover its footing ought to the pair break beneath the 0.6700 psychological deal with. Subsequent week’s elementary information might be the catalyst that both validates/invalidates the bear flag.

Key resistance ranges:

Key help ranges:

• 0.6700
• Bear flag help
• 0.6620

IG CLIENT SENTIMENT DATA: BEARISH

IGCS exhibits retail merchants are at present LONG on AUD/USD, with 73% of merchants at present holding lengthy positions. At DailyFX we sometimes take a contrarian view to crowd sentiment leading to a short-term draw back disposition.

Contact and followWarrenon Twitter:@WVenketas