Aussie dollar soared after the release of the neutral estimate. Also, the board will maintain the official cash rate unchanged (1.5%). In the recent speech by Deputy Governor Guy Debelle and Governor Philip Lowe, they stressed on removing the significance of the rate’s inclusion in the July minutes.
According to the industry survey, new homes sales fell sharply to the lowest in June, though conditions were quite different across states. According to the survey performed by Housing Industry Association (HIA), it has been found out that new home sales fell to 6.9% in June, reversing two months of gains.
Australian consumer prices increased a bit last month which proves that inflationary pressures are building.
Annual inflation after plunging to 2.3% last month and rose to 2.7% this month. Australia’s official inflation gauge also weakened more than expected in June. According to the Australian Bureau of Statistics report, the consumer price index fell to 1.9% in the second quarter.
It is expected that a significant rise in Aussie dollar could drop the core inflation to 0.5% in the next three years.
The AUD/USD price forms an obstacle against the negative attempts at 0.9969, keeping the sideways stability below the main bearish resistance that is located at current levels. Therefore, we wait for the price to renew the negative attempts to achieve the waited targets at 0.9869. In spite of the repeated positive attempts for the price action and its attempt to settle above the resistance levels, we keep preferring the bearish domination if the resistance settled at 0.9969. The price gets new negative momentum by stochastic surpass near 50.0 level to expect the price decline towards 0.9869 that forms the first negative target in the near period. Therefore, we will keep preferring the bearish bias in the upcoming period, and look for price action once they reach the 50EMA for further confirmation on the momentum on the pair. A break here can take the pair to the 100SMA.
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