Aussie Stumbles, As Risk Of Rate Cut Looms
Late yesterday, Australian Bureau of Statistics reported that the consumer price index (CPI) for the first quarter in 2016 edged 0.2% lower, after a rise of 0.4% in the previous quarter. On a yearly basis, the annual inflation rate marked a record low at 1.3% – the lowest since 2008, including increases of 0.6% and 1.7% in tradeable goods and non-tradable goods, respectively.
Facing the weakest annual consumer-price gain in the last eight years, the country’s inflation is anticipated to not meet the target of 2% for a continued period. The Reserve Bank of Australia is expected to lower its interest rates at its meeting next week.
Statistics New Zealand reported on April 26 that due to declines in primary produce exports in March, the annual trade balance deficit registered at $3.8 billion, the largest reading in seven years. The value of imports (seasonally adjusted) fell to $12.8 billion, 3.2% lower than imports for the previous quarter, while the value of exports slid 1.2% to $11.9 billion.
Today, the Reserve Bank of New Zealand is scheduled to announce the official cash rate with an expectation for the rate to remain unchanged at 2.25%.
Fig. AUDNZD D1 Technical Chart
RSI (14) is pointing down and has fallen to 46.7183, indicating an upcoming bearish market. The parabolic SAR band was reversed by a bearish candle, and has begun to appear above the price chart, thus confirming the downtrend. The Aussie is expected to keep tumbling against the Kiwi, leading the pair to test the support at 1.09640.
Sell at 1.10675, Stop loss at 1.10823, Take profit at 1.10434