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11.07.202400:47 Forex Analysis & Reviews: Australian dollar riding a wave of optimism: Overview of AUD/USD

The NAB survey showed that business confidence increased by 6 points to 4 in June, driven by growth in all sectors except construction. Business conditions, which measure sales, employment, and profitability, decreased by 2 points to 4, which is below their long-term average.

Earlier, the Westpac household survey was published, showing the opposite trend – consumer sentiment fell to 82.7 points, with the index remaining below 100 points since March 2022. These two sets of data highlight a divergence in the sentiments of businesses and households.

From the perspective of inflation and potential Reserve Bank of Australia policy changes, it is worth taking note of the decrease in labor costs – the lower the wages, the less inflation is fueled by reduced spending.

Exchange Rates 11.07.2024 analysis

The next RBA meeting is almost a month away, and markets have not yet given up on the view that the RBA could raise rates to 4.6%. The key factor here will be the inflation report for the 2nd quarter, which will be published a week before the meeting.

Currently, the market sees about a 20% chance of a rate hike in August, and around a 50% chance of a rate cut at the September meeting. Everything will depend on the inflation report, so it is unlikely for the Australian dollar to plummet in the coming week.

For now, the aussie is riding a wave of positivity. The net short AUD position has fallen to a three-year low, and the price is firmly rising.

Exchange Rates 11.07.2024 analysis

The AUD/USD pair has tested its 6-month high, and we expect it to rise further. The nearest target is 0.6874, which is still far off, but the trend towards sustained growth looks convincing. Consolidation above this level will strengthen the bullish outlook for the aussie, with support at 0.6720, as it is unlikely for the AUD to fall below this support.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Kuvat Raharjo,
Analytical expert of InstaSpot
© 2007-2024
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