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Australian Annual Inflation Reaches Another Peak

10/26/2022 12:48 PM

The AUD/USD pair demonstrates a neutral trend and, against the background of the correction of the US dollar, is actively adding value, trading around 0.6470.

Morning inflation statistics confirmed the fears of the Reserve Bank of Australia (RBA), which warned last month that the third and fourth quarters could be the most difficult for the national economy: monthly consumer price growth was 1.8%, which is in line with September dynamics, and this led to increasing the annual rate to another historical record since 1990 at 7.3%. The Australian Treasury has suggested that inflation will peak at the end of the year – in December, it will be 7.75%. The weighted average consumer price index, excluding some variables, increased by 1.8%, up from September's 1.5% increase. Thus, despite regulators' statements that they are in control of the situation, the tactic of slowing down the increase in interest rates has not yet yielded results, and it may be revised at the next meeting.

The US dollar today fell below 111.000 in the USD Index: investors were disappointed by yesterday's report from the Conference Board, according to which the US consumer confidence index fell to 102.5 points from 107.8 points a month earlier. Analysts also adhere to negative assessments regarding the housing market, expecting a drop in sales in September by 13.9% to 585.0K from 685.0K, which will strengthen the downward dynamics of the national currency.

On the daily chart of the asset, the price is moving below the support line of the local channel, correcting upwards.

Technical indicators maintain a weakening sell signal: fast EMAs on the Alligator indicator are held below the signal line, and the AO oscillator histogram is deep in the sell zone.

Resistance levels: 0.6480, 0.6640. | Support levels: 0.6310, 0.6165.

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