The Australian dollar shows moderate growth, recovering from a strong decline at the beginning of the week, when the AUD/USD pair retreated from its local highs from September 13. The instrument is testing the level of 0.6800 for a breakout, taking advantage of the strengthening of corrective sentiments in the US currency.
This week, the Reserve Bank of Australia (RBA) raised interest rates by 25 basis points to a 10-year high of 3.1%. This was already the eighth adjustment since May, and in total the indicator has already added 300 basis points. The Governor of the regulator, Philip Lowe, said that officials will continue to have a "hawkish" monetary policy to combat record inflation, but will base their decisions on macroeconomic data, as well as an assessment of the outlook for inflation and the labor market. The January Consumer Price Index report is likely to show an increase to 8.0% in the fourth quarter, but in 2024, according to preliminary estimates, the figure may drop to 3.0%, while Gross Domestic Product (GDP) in 2023-2024 is expected at the level of 1.5%.
However, a more confident growth of the Australian dollar is hampered by ambiguous macroeconomic statistics from Australia and China. Australian data released yesterday showed exports down 1.0% in October after rising 7.0% a month earlier, while Imports also fell 1.0% after rising 0.4% in September. As a result, the Trade Surplus corrected from 12.444 million Australian dollars to 12.217 million Australian dollars. In turn, today's data from China disappointed investors with a 0.2% fall in the Consumer Price Index in November after rising by 0.1% in the previous month, and in annual terms, inflation slowed down from 2.1% to 1.6%, which turned out to be better than analysts' expectations of a reduction to 1.0%.
Bollinger Bands in D1 chart show moderate growth. The price range is actively narrowing, pointing at ambiguous nature of trading this week. MACD indicator is growing, forming a new buy signal (located above the signal line). Stochastic shows a similar trend, bouncing off the "20" level in the middle of the week.
Current showings of the indicators do not contradict the development of the "bullish" trend in the near future.
Resistance levels: 0.6800, 0.6850, 0.6900, 0.6950. | Support levels: 0.6750, 0.6700, 0.6650, 0.6583.