The industry in Australia shows signs of slowing down.

The Australian dollar has strengthened again, following positive signals in the stock market and commodity prices, buoyed by signs of easing inflation in the United States. Meanwhile, investors are looking ahead to potential interest rate cuts by the European Central Bank and the U.S. Federal Reserve, which could occur in their meetings this week and next. Additionally, the market has lowered its expectations that the Reserve Bank of Australia (RBA) will ease its monetary policy as early as November, due to the continued tightness in the labor market.

The Australian economy grew by 0.2% quarter-on-quarter in Q2 of 2024, with growth primarily supported by a slight increase in government spending. Meanwhile, household spending, which accounts for half of GDP, declined again after rising in the previous two quarters. This decrease is due to high interest rates reducing household spending capacity, leading to expenditures focused only on essential goods.

Corporate profits in Australia contracted by 5.3% compared to the previous quarter in Q2, a much steeper decline than the market’s expectation of just a 0.9% drop. This downturn was driven by continued declines in profits across various sectors, especially in the mining sector, where profits fell by more than 10.9%, impacted by rapidly declining demand both domestically and internationally.

The industrial index in Australia's manufacturing sector fell sharply by 11.3 points to -30.8 in August. Some sectors, such as chemicals, saw slight improvements due to new orders and increased export sales, despite uncertainties in the global economy. Meanwhile, the minerals and metals sector declined to -40.7 due to slowing orders and rising production costs, affected by pressure from high interest rates and increased import costs.

Job advertisements, according to ANZ's report, contracted by 2.1% month-on-month in August, marking the seventh consecutive month of decline. This reflects the decreasing demand for labor due to a slowing economy and high borrowing costs. ANZ economist Madeline Dunk added that the downward trend in job advertisements and rising unemployment rates indicate that supply and demand in the labor market are returning to balance.

The yield on 10-year Australian government bonds remained steady at around 3.9% as investors awaited the release of other economic data. Analysts noted that high interest rates are dampening demand for various goods, which would result in a slight economic slowdown. Additionally, the labor market remains tight relative to employment levels, which could complicate any rate cuts while inflation remains high, potentially leading to a resurgence in inflation.

Techical analysis data (5H)

Resistance: 1.5009, 1.5043, 1.5073

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.4915 - 1.4944 but cannot break the support at 1.4944, you may set a TP at approximately 1.5043 and SL at around 1.488 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.5009 - 1.5043, you may set a TP at approximately 1.5073 and SL at around 1.4915 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.5009 - 1.5043 but cannot break the resistance at 1.4915, you may set a TP at approximately 1.5009 and SL at around 1.5073 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.4915 - 1.4944, you may set a TP at approximately 1.488 and SL at around 1.5043 or according to your acceptable risk.

Pivot point September 12, 2024 10:04 PM. GMT+7