- US consumer prices rose 0.3% in April, down from a 0.4% increase the previous month.
- US retail sales fell to 0.0% from 0.7% the previous month.
- Wage growth in Australia surprisingly slowed from a 15-year high in Q1.
The AUD/USD forecast shows an increase in bullish sentiment as the dollar falls after a weaker report on consumer inflation. Consequently, there is a higher chance that the Fed will cut rates in September. Meanwhile, rate cuts in Australia could start in 2025, putting Australia in a stronger position against the dollar.
–Are you interested in learning more about crypto robots? Check out our detailed guide-
US consumer prices rose 0.3% in April, down from a 0.4% increase the previous month. Meanwhile, on an annual basis, inflation was in line with expectations, falling from 3.5% to 3.4%. This is likely to give policymakers more confidence that the downward trend is intact. Therefore, after a brief pause, consumer prices could continue lower. Notably, Powell maintained this outlook on Tuesday when he said inflation would continue to decline.
Meanwhile, there was more relief for the Fed as retail sales fell to 0.0% from 0.7% the previous month. Economists expected a smaller decline to 0.4%.
Elsewhere, data from Australia on Wednesday showed wage growth surprisingly slowed from a 15-year high in the first quarter, pointing to looser labor market conditions. Annual wage growth fell from 4.3% to 3.8%. As a result, there is less pressure on the RBA to raise rates.
However, rate cuts may not start in Australia until next year. Furthermore, there is still an 8% chance that the RBA will raise rates later in the year. This means that the Aussie will maintain its lead against the dollar.
AUD/USD key events today
Investors will continue to absorb US consumer inflation as no more key reports are expected from Australia or the US.
AUD/USD Technical Forecast: Bullish momentum crosses solid resistance
On the technical side, the AUD/USD price broke above the 0.6650 resistance barrier amid increasing bullish momentum. At the same time, the RSI entered the overbought region, showing solid bullish momentum and supporting the bullish bias.
–Are you interested in learning more about buying Dogecoin? Check out our detailed guide-
This rise comes after the price found support at its bullish trend line and the 30-SMA line. If the price closes above 0.6650, it will confirm the continuation of the larger bullish trend. However, if it pulls below, it could reverse to the support trendline and support of the 30-SMA.
Do you want to trade Forex now? Invest in eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
