The Reserve Bank of Australia (RBA) may raise interest rates again. 

The Australian dollar strengthened slightly as the RBA showed uncertainty about adjusting interest rates at the last meeting. The RBA Governor also added that the board is still deliberating on whether a rate hike is necessary and there has been no discussion of a rate cut. This led investors to lower their expectations for an RBA rate cut from around 64% to just 36%, suggesting only a slight chance of a rate cut this year.

Australia’s trade surplus for goods increased to AUD 6.55 billion after falling to AUD 4.84 billion in the previous month, exceeding market expectations of AUD 5.40 billion. This was due to exports decreasing less than imports amid declining domestic demand.

Exports of Australian goods contracted by 2.5% month-on-month, amounting to AUD 43.32 billion in April, primarily driven by metal ore exports, while coal, coke, and oil sales saw a slight decline due to stable energy prices and not much increase in foreign demand. Most exports continued to go to China, Japan, and India.

Imports of goods into Australia fell by 7.2% month-on-month to a three-month low of AUD 36.77 billion, as purchases of intermediate goods for production of essential goods decreased by 9.6% to AUD 15.36 billion. This was pressured by processed industrial supply, indicating a potential slowdown in the manufacturing sector. Additionally, imports of consumer goods continued to contract.

The number of job advertisements increased by 2.3% quarter-on-quarter, up from 1.5% in the previous quarter. Additionally, retail sales expanded by 1.6%, supported by growth in the service sector, with new business openings contributing to the increase in job positions. Alan Oster, Chief Economist at NAB, stated that the RBA might keep interest rates steady for a while to ensure that inflation does not rise again, forecasting that inflation will be around 2-3% by 2025.

Techical analysis data (5H)

Resistance: 1.5005, 1.5085, 1.503

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.4967 - 1.498 but cannot break the support at 1.498, you may set a TP at approximately 1.5017 and SL at around 1.4956 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.5005 - 1.5017, you may set a TP at approximately 1.503 and SL at around 1.4967 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.5005 - 1.5017 but cannot break the resistance at 1.4967, you may set a TP at approximately 1.5005 and SL at around 1.503 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.4967 - 1.498, you may set a TP at approximately 1.4956 and SL at around 1.5017 or according to your acceptable risk.

Pivot point June 19, 2024 08:55 PM. GMT+7