AUD/USD trading idea on August 30, 2024
In the Asian session on Friday, AUD/USD shows an upward trend, continuing the movement started a day earlier. The pair is approaching the important resistance of 0.6800 and is trading near the maximum values of the end of last year. However, the volatility of currency pairs in the market remains restrained, as traders prefer to refrain from active actions in anticipation of important news from the United States.
Australian retail sales data released this morning turned out to be disappointing. Sales volumes fell from 0.5% to 0% in July. The head of the Reserve Bank of Australia, Michelle Bullock, previously stated that there are no plans to reduce interest rates in the near future, since inflation, according to her forecasts, will remain above the target level of 2-3% by the end of 2025. This means that the current high rate level may persist for a long time. Analysts believe that weak retail sales will not have a significant impact on the RBA's policy, as high inflation risks in the country are caused by systemic factors such as activity in the service sector and wage growth. Other data from Australia showed that lending volumes in the private sector changed slightly in July: growth was 0.5% on a monthly basis and 5.7% on an annual basis.
Today, market participants' attention is focused on the index of personal consumption expenditures in the United States, which may affect the Fed's decision on rates. The core spending index is expected to rise from 2.6% to 2.7%, and the broader index from 2.5% to 2.6%. It is also planned to publish data on personal income and expenses, where income is likely to remain at 0.2%, and expenses may increase to 0.5%. The head of the Federal Reserve Bank of Atlanta, Rafael Bostic, recently noted that the time for easing the Fed's policy has already come. This strengthens traders' confidence in a rate cut at the September meeting. If the spending data turns out to be below forecasts, this may confirm a further slowdown in inflation in the United States, which will put pressure on the dollar and give the AUD/USD pair a chance to rise above the 0.6850 level.
It is recommended to open long positions on AUD/USD when the 0.6820 level breaks up with a target of 0.6950 and a stop loss of 0.6770.