The RBA may raise interest rates again in the August meeting.

The Australian dollar strengthened near its six-month high, supported by the weakening US dollar. This decline in the US dollar is due to weaker-than-expected economic data from the US, leading investors to predict more interest rate cuts by the Federal Reserve. Additionally, Fed Chair Jerome Powell stated this week that recent data indicates a declining inflation trend, but assured that inflation needs to be on a definite downward path before considering rate cuts.

In Australia, job advertisements fell by 2.2% month-on-month in June, following a 1.9% decline in the previous month. This marks the fifth consecutive month of declining job advertisements amid reduced labor demand due to a slowing economy and higher borrowing costs. Furthermore, job advertisements offered salaries below the standard for cleaners, craftsmen, and food service workers.

Madeline Dunk, an economist at ANZ, said, "The decline in job ads is becoming more severe, and we are seeing similar situations across other industries in the national labor market." There are also further predictions that the unemployment rate will rise slightly to 4.3% year-on-year.

The Reserve Bank of Australia (RBA) held the interest rate steady at 4.35% during the June meeting, marking the fifth consecutive time it has kept the rate unchanged since the last hike in November 2023. However, the central bank has warned that inflation remains above its target of 2-3%, with much of the inflation driven by continued high costs in the service sector. Recent economic data emphasize the need to monitor inflation risks closely.

The committee still views economic activity as weakening, potentially leading to another slowdown in GDP growth. Additionally, rising unemployment and slower-than-expected wage growth necessitate policymakers to closely monitor the global economy and observe inflation and labor market trends.

Australia's Consumer Price Index (CPI) rose by 4.0% month-on-month in May, up sharply from 3.6% in April and above market expectations of 3.8%. This inflation rate remains higher than the RBA's target of 2-3% due to rising energy prices, particularly a more than 6.5% increase in electricity costs. Additionally, higher oil prices have led to increased transportation costs, pushing up prices for most goods.

Techical analysis data (5H)

Resistance: 1.4871, 1.488, 1.4885

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.4852 - 1.4857 but cannot break the support at 1.4857, you may set a TP at approximately 1.488 and SL at around 1.4843 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.4871 - 1.488, you may set a TP at approximately 1.4885 and SL at around 1.4852 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.4871 - 1.488 but cannot break the resistance at 1.4852, you may set a TP at approximately 1.4871 and SL at around 1.4885 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.4852 - 1.4857, you may set a TP at approximately 1.4843 and SL at around 1.488 or according to your acceptable risk.

Pivot point July 4, 2024 07:06 PM. GMT+7