On Thursday, June 27th, the AUD/USD rebounded and reached a high of 0.6664. Australian inflation is still a focus, with particular attention paid to consumer inflation expectations. Market bets on a rate hike by the Reserve Bank of Australia have surged, with forecasts showing that Australian households will face more pain.

(Source: FX168)

Australian consumer inflation expectations data may affect the demand for buying AUD/USD, with economists predicting that consumer inflation expectations in June will rise from 4.1% to 4.3%. Higher-than-expected data may solidify investor bets on an August rate hike by the Reserve Bank of Australia.

On Wednesday, the monthly Australian Consumer Price Index (CPI) index showed an annual inflation rate of 4% in May, up from 3.6% in April. David Ingles, Bloomberg Television's Chief Market Editor for Asia-Pacific, responded to the monthly CPI figures, saying that 'after Australia released its third higher-than-expected inflation report, interest rate futures and swaps are currently predicting a nearly 50% chance of a rate hike by the Reserve Bank of Australia in September.'

At the June meeting of the Australian Reserve Bank, Michelle Bloc, of the Australian Reserve Bank, stated that the board members of the Reserve Bank of Australia discussed raising interest rates. At the time of the interest rate discussion, the monthly CPI index was at 3.6%.

Rising consumer inflation expectations may affect the confidence and consumption patterns of Australian consumers. Private consumption accounts for over 50% of Australia's contribution to the economy. Whether the Australian Reserve Bank will raise interest rates depends on the next round of inflation data.

When investors consider the impact of Australian inflation data on interest rate trends in the Australian Reserve Bank, China remains another focus of attention.

Although inflation is still a focus, China's industrial profit data may have an impact.

China's industrial enterprise profits above a designated scale from January to May decreased from 4.3% to 3.4%, and profits for industrial enterprises above a designated scale in May decreased from 4.0% to 0.7%.

The Australian economy and the Australian dollar are still sensitive to China's economic indicators, as China accounts for one-third of Australian exports. In addition, Australia's trade accounts for more than 50% of the country's gross domestic product (GDP), and 20% of the workforce is engaged in trade-related work. Deterioration in China's macroeconomic environment may affect demand, the Australian economy and the Australian dollar.

In February 2023, China's industrial losses reached 22.9%, and then industrial enterprises returned to profitability in February 2024.

When investors consider data from Australia and China, US economic indicators may affect the trend of US interest rates.

Later in Thursday, the number of initial jobless claims in the United States will attract investors' attention. Economists predict that the number of initial jobless claims for the week ending June 22 will drop from 238,000 to 236,000.

An unexpected decrease may reduce investors' bets on a rate cut by the Federal Reserve in September. Tightening labor market conditions may support wage growth and increase disposable income. Increased disposable income may stimulate consumer spending and demand-driven inflation.

Maintaining high monetary policy may increase borrowing costs, reduce disposable income, and thus suppress demand-driven inflation. Other statistical data includes final GDP data and durable goods orders. However, unless GDP data is revised or durable goods orders fall, these data may still be below labor market data.

In the short-term forecast, the recent trend of the Australian dollar/US dollar will depend on inflation data from Australia and the United States. If US inflation data is lower than expected, currency policy disagreements may favor the Australian dollar. Investor bets on the Reserve Bank of Australia's rate hike in August rose after the Australian dollar monthly CPI index was raised.

On the contrary, investor hopes for the Federal Reserve's rate hike in September may depend on the US PCE inflation data released on Friday.

Technical analysis of the Australian dollar/US dollar

FXEmpire analyst Bob Mason said that the Australian dollar/US dollar is still firmly maintained above the 50-day and 200-day EMA, confirming the bullish price signal.

Breaking through $0.66500 USD may indicate a move to the resistance level of $0.67003 USD. Breaking through the $0.67003 USD resistance level of the Australian dollar/US dollar may lead the bulls to rush towards $0.67500 USD.

On the contrary, if the Australian dollar/US dollar falls below the 50-day EMA, it may indicate a fall to the 200-day EMA and the support level of $0.65760 USD.

The 14-day daily RSI reading is 52.51, and the Australian dollar may rise to $0.67500 USD and then enter the overbought area.

(Source: FXEmpire)