The RBA may increase interest rates in the future.

The Australian dollar has weakened slightly due to investors awaiting information on Australia's inflation rate, which could influence the central bank's future policy decisions. The inflation rate in Australia is expected to accelerate slightly, and the latest RBA meeting indicated policymakers' inclination to further increase interest rates. However, the RBA needs sufficient time to ensure that inflation returns to target before making additional rate hikes.

The Services PMI rose to 52.8 in February, up from 49.1 the previous month, marking the first expansion in the service sector in five months. This expansion is driven by increased momentum from new businesses and rapid growth, leading various businesses in Australia to hire more employees to cope with the increased workload. However, rising input costs have caused raw material prices to increase. Some companies are also concerned about the high interest rates.

The Manufacturing PMI decreased to 47.7 in February from 50.1 the previous month, primarily due to a rapid decline in new orders, resulting in manufacturing sectors needing to reduce production capacity and decreasing employment levels. Additionally, conflicts in the Red Sea have caused delays in raw material shipments, further increasing raw material costs and transportation costs, leading many companies to pass on the increased costs at a faster rate.

The seasonal adjusted wage index for Australia increased by 4.2% annually in the fourth quarter of 2023. Public sector wages increased by 4.3%, while private sector wages continued to increase at 4.2%. When divided by industry, most industries saw wage adjustments of over 3%, especially in education and training, which saw the highest increase.

Australia's leading economic index decreased by -0.1% in January, with economic activity expected to decline further by -0.25% in the next 3-9 months, reflecting a slowdown in short-term growth forecasts. However, there are positive factors that could benefit exports, such as the adjustment of consumer goods prices.

Consumer inflation expectations in Australia were at 4.5% in February, with cost concerns expected to decrease due to a 425 basis points increase in interest rates over the past year. However, Michele Bullock, the head of the Reserve Bank of Australia, disagrees with international financial institutions recommending further interest rate hikes.

Techical analysis data (5H)

Resistance: 1.5278, 1.5294, 1.5319

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.5212 - 1.5236 but cannot break the support at 1.5236, you may set a TP at approximately 1.5294 and SL at around 1.5195 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.5278 - 1.5294, you may set a TP at approximately 1.5319 and SL at around 1.5212 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.5278 - 1.5294 but cannot break the resistance at 1.5278, you may set a TP at approximately 1.5212 and SL at around 1.5319 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.5212 - 1.5236, you may set a TP at approximately 1.5195 and SL at around 1.5294 or according to your acceptable risk.

Pivot point February 26, 2024 11:40 AM. GMT+7