- The Reserve Bank of Australia held rates at 4.35% on Tuesday.
- Australia’s inflation is at 3.6%, well above the central bank’s target.
- Economists expect the US retail sales figure to come in at 0.3%.
The AUD/USD outlook is slightly bullish as the Aussie edges up after the Reserve Bank of Australia policy meeting. Meanwhile, the dollar remained steady as investors waited for the US retail sales report to provide more clues on the state of the economy.
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The Reserve Bank of Australia held rates at 4.35% on Tuesday but discussed the possibility of hiking interest rates. Australia’s inflation is at 3.6%, well above the central bank’s target. Therefore, the RBA has remained cautious, and markets expect it to be among the last central banks to start cutting interest rates. RBA Governor Bullock said recent data had raised fears that inflation remained high.
After the decision, the Aussie rose slightly before reversing. At the same time, bets for an RBA cut in December fell from 65% to 44%.
Meanwhile, the US dollar was steady as investors waited for the US retail sales report, which will show the state of consumer spending. Economists expect the figure to come in at 0.3%, higher than the previous month’s 0.0%. If this is the case, it will indicate an increase in consumer spending, likely boosting the dollar.
At the same time, market participants await speeches from several Fed officials that will give clues on the outlook for rate cuts. Last week, Fed rate cut expectations fluctuated as the data showed easing inflation while the Fed maintained a cautious outlook, projecting only one rate cut this year.
AUD/USD key events today
- US core retail sales
- US retail sales
AUD/USD technical outlook: Price nears 0.6580 range support.
On the technical side, the AUD/USD price is consolidating between the 0.6580 support and the 0.6701 resistance levels. Bears are in the lead within this range area because the price trades below the 30-SMA. At the same time, the RSI is below 50, in bearish territory. Moreover, the price is closer to the range support than the range resistance.
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Currently, bulls are testing the 30-SMA resistance but have made a large wick, indicating rejection. Therefore, there is a high chance the price will fall to retest the range support. A break below this level would allow the price to start trending lower.
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- Source: https://www.forexcrunch.com/blog/2024/06/18/aud-usd-outlook-aussie-gains-following-rba-policy-meeting/
