Australia continues to face inflationary pressures.

The Australian dollar has been weakening continuously since the beginning of the month due to stronger-than-expected U.S. economic data. Additionally, the release of the latest policy meeting minutes from the Reserve Bank of Australia (RBA) has bolstered investor expectations that the RBA will cut interest rates by at least 25 basis points by the end of the year to support the slowing economy and labor market.

In its September meeting, the RBA reported that while core inflation in Australia remains elevated, the bank predicts that headline inflation will fall below 3% due to electricity subsidies, which are helping to stabilize the prices of most goods and services.

However, the RBA emphasized that monetary policy needs to remain tight enough to ensure inflation returns to the target range of 2-3%. The current interest rates are deemed sufficient to offset inflation risks. In terms of GDP, weak output growth, lower-than-expected household consumption, and a slowing export outlook might prompt the central bank to reconsider its policy stance. Nonetheless, policymakers believe that Australia's interest rates do not need to align with those of other central banks due to domestic inflationary pressures and a still-strong labor market.

Australia's business confidence index rose to -2 in September from -5 in August, amid improvement in the retail sector. However, the figure remains below average, as businesses continue to feel the impact of high interest rates and persistent inflation, despite a slight easing in labor costs.

Australia's trade surplus stood at AUD 5.64 billion in August, the highest since April, even though both exports and imports saw slight declines. Exports fell 0.2% from the previous month to AUD 43.23 billion, mainly due to a slight drop in meat and metal exports. Imports also fell 0.2% to AUD 37.58 billion, the lowest in four months, as purchases across several industries decreased, with consumer goods contracting the most at 4.2%.

Techical analysis data (5H)

Resistance: 1.4886, 1.49, 1.4919

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.4834 - 1.4853 but cannot break the support at 1.4853, you may set a TP at approximately 1.49 and SL at around 1.482 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.4886 - 1.49, you may set a TP at approximately 1.4919 and SL at around 1.4834 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.4886 - 1.49 but cannot break the resistance at 1.4834, you may set a TP at approximately 1.4886 and SL at around 1.4919 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.4834 - 1.4853, you may set a TP at approximately 1.482 and SL at around 1.49 or according to your acceptable risk.

Pivot point October 10, 2024 09:23 PM. GMT+7