AUD/USD edged down about 0.3% on Tuesday to the 0.6970 area, despite hawkish remarks from Reserve Bank of Australia Governor Michele Bullock. She said underlying inflation remains too high and argued that “some further easing in the growth of demand is likely to be required” to return inflation sustainably to the RBA’s 2%–3% target, adding the Board is prepared to act, including raising the cash rate further if needed. The currency softened as markets weighed the risk that extra tightening could weaken domestic activity and the labour market.
US Consumer Confidence and Upcoming Australian CPI Data
In the US, the Conference Board Consumer Confidence Index slipped to 90.8 in July from an upwardly revised 92.2 in June; the Present Situation Index fell for a third month to 114.9, while the Expectations Index held at 74.7. Focus now turns to Australia’s June CPI: headline CPI is expected to rise 0.2% MoM after a 0.7% fall, with annual inflation seen at 4.0%; Trimmed Mean CPI is forecast at 0.4% MoM, and the annual underlying measure was previously 3.6%. On the 4-hour chart, the pair traded at 0.6969 below the 100-period SMA at 0.6971 and the 20-period SMA at 0.6983, with RSI around 41; resistance sits at 0.6971, 0.6975, 0.6981, 0.6983 and 0.6987, while support is at 0.6964.
