RBA Tightening Expectations Anchor the Aussie
Why isn’t the AUD/USD crashing on such bad sentiment? Simple. The RBA is trapped. With average pump prices hitting $2.40/litre and inflation expectations rising, the RBA can’t afford to be dovish. I noticed that the ASX 30 Day Interbank Cash Rate Futures are now pricing in a 64% chance of a hike to 4.35% in May. Higher yields equal a stronger currency. Domestic consumers are suffering, but the global stagflation trade is keeping the Aussie supported as a commodity-linked proxy.
Weekly Supertrend Flips to Bullish Territory
The medium to long-term chart has finally cleared its throat. After a couple weeks of compression, we’ve seen price action punch through the weekly Short Supertrend ceiling. We’re reclaiming the previous high from early March. This doesn’t seem to be just a relief rally. The trend has shifted back to positive with a firm floor at 0.6725.
