AUD/USD outlook for May 1-5

AUD/USD outlook for May 1-5

Aussie declined from 0.7585 to 0.7440 in the course of the past week following the disappointing outcome for CPI figures. Annual core inflation data accelerated to just below the lower end of the Reserve Bank of Australia’s target underscoring its decision not to change its current loose monetary policy.

Next week, the RBA is set to deliver its rate and monetary policy statements on Tuesday and Friday accordingly. The bank’s policymakers are expected to stay on hold fearing that additional cuts could further inflame east coast house prices. Another concern of the bank’s officials is a pronounced slack of Australia’s labor market. Keep an eye on China’s manufacturing and non-manufacturing PMI releases coming this Sunday. Disappointing updates might hurt the Aussie. The US dollar will have a very busy calendar next week with Fed’s rate announcement on Wednesday and US labor market report on Friday.  

The Aussie was trading rangebound in the last two days consolidating after the sharp fall that started on Monday. While oversold, it might slide lower towards 0.7440 (April 27 low), or towards the solid support at 0.7400. If upper border of  0.7438 – 0.7490 consolidation range is broken, the quotes will rise higher towards 0.7515, 0.7550 levels. 

 

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