The Reserve Bank of Australia (RBA) is expected to maintain interest rates for a longer period.

The Australian dollar has stabilized after appreciating since the beginning of the month, as the U.S. dollar weakened rapidly due to expectations that the Federal Reserve might lower interest rates in the coming months to avoid a recession. The minutes of the latest RBA meeting indicated that it might be necessary to keep interest rates higher for longer. Additionally, RBA Governor Michele Bullock hinted that while inflationary pressures are beginning to ease, it is still too early to consider cutting interest rates.

Australia's leading economic index remained stable in July, marking four consecutive months of stability. However, the growth of economic activity in the next 3-9 months shows a slightly better growth outlook. Nonetheless, the rapid decline in commodity prices in recent weeks suggests that momentum may weaken again in August. GDP growth is projected to be 0.8% in the first half of 2024, with slightly higher growth expected in the second half of 2024 and early 2025.

Australia's unemployment rate increased to 4.2%, higher than the market's expectation of 4.1%, marking the highest unemployment rate since 2024. The number of unemployed people rose by 23,900 to 637,100, with the majority being full-time job seekers. Meanwhile, employment saw an increase of 58,200 to 14.47 million people, exceeding the forecast of only a 20,000 increase.

The Australian consumer confidence index rose by 2.8%, reaching its highest level in six months at 85.0 in August. This boost in confidence was supported by tax cuts and other financial cost reductions that helped alleviate financial stress in households, while concerns about rising interest rates have begun to ease. The labor market showed only a slight slowdown in employment.

The yield on Australian government bonds with a 10-year maturity has decreased to around 3.9%, as investors continue to await further assessments of the RBA's monetary policy outlook. The latest RBA meeting minutes reiterated the decision to keep interest rates high to suppress inflation from rising again. The RBA continues to target an inflation rate of around 2-3%, with most inflationary pressures stemming from the services sector, which remains at elevated levels.

Techical analysis data (5H)

Resistance: 1.485, 1.5202, 1.4882

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.4804 - 1.4818 but cannot break the support at 1.4818, you may set a TP at approximately 1.4868 and SL at around 1.4787 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.485 - 1.4868, you may set a TP at approximately 1.4882 and SL at around 1.4804 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.485 - 1.4868 but cannot break the resistance at 1.4804, you may set a TP at approximately 1.485 and SL at around 1.4882 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.4804 - 1.4818, you may set a TP at approximately 1.4787 and SL at around 1.4868 or according to your acceptable risk.

Pivot point August 21, 2024 08:35 PM. GMT+7