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AUDUSD Market Update

9/6/2022 12:41 PM

The Australian dollar shows multidirectional dynamics, consolidating near 0.6800. The AUD/USD pair is trying to develop an upward momentum in the ultra-short term, but today the "bulls" are facing significant resistance after the publication of the decision of the Reserve Bank of Australia (RBA) to raise the interest rate.

As expected, the Australian regulator decided to adjust the value by another 50 basis points to 2.35%, explaining this by the desire to return inflation to the target range of 2–3%. Representatives of the regulator, as before, noted the existing risks due to the slowdown in the global economy, the rise in energy prices and the persistence of threats from COVID-19. Current RBA forecasts suggest that by the end of 2022, inflation will be approximately 7.5%, next year it is expected to slow down sharply to 4.0%, and in 2024 prices may fall to the upper limit of the target range of 3%.

Yesterday's inflation data from TD Securities showed a 0.5% decline in August after rising 1.2% a month earlier, and in annual terms, the pace slowed down from 5.4% to 4.9%. In turn, the Commonwealth Bank Services PMI in August increased from 49.6 points to 50.2 points with a neutral forecast.

Meanwhile, the Australian authorities announced an increase in the number of migrants coming to the country to 195.0 thousand. It is noted that the initiative, first of all, will help the national labor market to cope with a serious shortage of labor, which was the result of quarantine restrictions imposed during the coronavirus pandemic. Such a decision may have a positive impact on inflation, since in the face of competition and an excess of staff, companies will not seek to raise wages in order to retain employees.

Bollinger Bands in D1 chart demonstrate a downtrend. The price range expands from below, making way for new local lows for the "bears". MACD shows a tendency to reverse to an upward plane, but still retains a sell signal (the histogram is below the signal line). Stochastic, having shown a rebound from the zero level, reversed in the direction of growth, signaling the prospects for "bullish" trend in the ultra-short term.

Resistance levels: 0.6839, 0.6900, 0.6950, 0.7000. | Support levels: 0.6800, 0.6750, 0.6700, 0.6650.

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