Australia continues to face high inflation rates.

The Australian dollar remains steady as investors remain concerned about unexpectedly strong inflation figures and predict that the Reserve Bank of Australia (RBA) will maintain interest rates. A rate cut is not expected until May next year. Additionally, the latest RBA meeting minutes suggest that there could be further rate hikes if inflation increases.

The Australian consumer confidence index fell by 0.3% month-on-month to 82.4 in May. This slowdown comes after the country's budget announcement, which focused on promoting employment and easing cost-of-living pressures, but still reflects an overall economic slowdown. The economic outlook for the next 12 months increased by 0.7%, while the outlook for the next five years increased by 2.6%. Furthermore, consumers are beginning to have a more positive view of their family financial prospects.

Inflation in Australia is slowing down more gradually than expected. The latest data and other economic indicators signal a risk that inflation might slightly increase. The RBA’s policy meeting report from May still shows policymakers' concerns about current inflation and revisits the topic of raising interest rates again to put more pressure on inflation.

Matthew Hassan, a senior economist at Westpac, stated that the current economic slowdown and fears of continuously rising inflation might necessitate another rate hike. However, policymakers emphasize that inflation needs to be within the 2-3% range, and unemployment rates are expected to align with future employment announcements.

The manufacturing PMI remained steady at 49.6 in May, indicating that the manufacturing sector continues to contract for the fourth consecutive month. The sector still faces pressures from rising raw material prices, reaching the highest level in a year, leading to increased average costs across several industries. This could potentially drive inflation in goods.

The services PMI was at 53.1 in May, with the services sector continuing to expand, albeit at a slower growth rate but still robust. The growth of new businesses remained steady, driven by increased customer interest and an expanding customer base for domestic service providers, especially from international businesses, which significantly contributed to the expansion of service activities.

Techical analysis data (5H)

Resistance: 1.5093, 1.5102, 1.5114

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.5058 - 1.5071 but cannot break the support at 1.5071, you may set a TP at approximately 1.5102 and SL at around 1.5049 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.5093 - 1.5102, you may set a TP at approximately 1.5114 and SL at around 1.5058 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.5093 - 1.5102 but cannot break the resistance at 1.5093, you may set a TP at approximately 1.5058 and SL at around 1.5114 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.5058 - 1.5071, you may set a TP at approximately 1.5049 and SL at around 1.5102 or according to your acceptable risk.

Pivot point May 29, 2024 08:17 PM. GMT+7