AUD/USD Price Analysis: Aussie Advances Despite Mixed Data

• In Q2, Australia’s wages increased slowly in the year.

• Employment in Australia picked up, leading to improved business conditions in July.

• Traders are on the edge, awaiting US wholesale and consumer inflation numbers.

The AUD/USD price analysis shows a slow uptrend as the Aussie climbs after a set of economic reports. However, volatility remained low as investors stayed on the sidelines ahead of US wholesale and consumer inflation reports.

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Australia released reports on Tuesday showing a mixed picture of the economy. In Q2, wages increased at the slowest pace in a year. The wage price index increased by 0.8%, missing forecasts of 0.9%. Meanwhile, the annual figure remained steady at 4.1%.

Slower wage growth shows that high interest rates are impacting the economy. Therefore, it shines a light on the Reserve Bank of Australia’s monetary policy. However, policymakers have remained hawkish as price pressures remain high. Consequently, there is a chance the central bank will start cutting rates next year. Still, this step in the right direction might increase rate-cut expectations.

Meanwhile, a separate report revealed that employment in Australia picked up, leading to improved business conditions in July. At the same time, cost pressures cooled amid high interest rates. The business conditions index increased by two points to +6. The Australian dollar rose slightly before pulling back. Nevertheless, the move was subdued amid caution ahead of US inflation figures. 

Traders are on the edge, waiting for wholesale and consumer inflation numbers. Cooler inflation pressure will likely boost expectations for a 50 bps September Fed rate cut. On the other hand, if inflation jumps, there will be a higher chance for a smaller 25 bps cut.

AUD/USD key events today

• US wholesale inflation 

AUD/USD technical price analysis: Bullish momentum remains subdued 

On the technical side, the AUD/USD price is slowly climbing above the 30-SMA. Bulls show little enthusiasm as they push prices towards the 0.6700 resistance level. Recently, there was a shift in sentiment as the price broke above the 30-SMA. This break came after a bullish RSI divergence. 

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However, bulls have remained subdued, keeping prices near the 30-SMA. Meanwhile, the RSI is moving sideways and has stayed below the overbought region, indicating weak momentum. If this trend continues, the price might reach the 0.6700 critical level. However, bears might emerge to push the price below the 30-SMA.

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