Australia has a couple of quarterly releases on the card this week. The trend of the Australian dollar is heavily dependent upon these economic events. Will they be enough to underpin Aussie? Let’s find out…
Australia’s consumer prices only grew by 1.8% from a year ago in Q4 2018. It’s better than the expected 1.7% expansion but slower than the 1.9% jump in the third quarter. While, the Reserve Bank of Australia (RBA)’s trimmed mean CPI kicked in at 1.8%, same as market forecast and Q3’s data.
For your info, the 1.8% figure was precisely below the RBA’s 2.0% – 3.0% target zone. That places a massive bearish pressure on the RBA either keep interest rates on hold or cut to down to support the weakening economy.
What Happens if this Australian Event Misses Forecast this Week?
If the current week’s economic events miss the RBA’s target band AGAIN, the market will start price in a sentiment of RBA rate cut. Most probably RBA will also be forced to keep the monetary policy dovish.
AUD/USD – Technical Analysis
On the technical front, the Aussie has weakened against the US dollar and its trading around $0.7160.
20, 25 and 50 periods EMA’s are pushing the AUD/USD lower while providing a strong resistance around $0.7160.
Key Trading Level: 0.7155
Right now, the Aussie is likely to continue trading on the lower side with a target of $0.7115, $0.7090 and $0.7050. All the best!