General analysis AUDUSD for 28.04.2022

Current Dynamics

Australia's inflation rate reached its highest level in 22 years. Volume of stocks of mineral resources in Australia has increased. About six million Australians will receive payments from the government.

The annual inflation rate in Australia reached 5.1% by March 2022, which is the highest rate since 2001. The rise in the Consumer Price Index is due to increased citizen spending on fuel and housing. Such a high rate of inflation increases the possibility that the Reserve Bank of Australia may increase interest rates at its next meeting. Along with that, with the RBA's modeling of the situation when the interest rate will be increased to 2% showed that the real estate market in Australia could fall by 15%.

Meanwhile, the Aussie Stock Exchange Index is descending on fears of a lockdown in the Chinese capital. Investors fear that China's "zero tolerance" to the pandemic coronavirus will lead to massive production shutdowns in Beijing. It is worth mentioning that according to Australia's annual Indicated Mineral Resource Report (AIMR) the reserves of rare-earth elements increased by 4%, lithium by 8%, vanadium by 23% and platinum group elements by 185%. Recall that Australia provides 49% of the world's supply of lithium, which is used to manufacture batteries for electric cars. Also worth noting that the government report Resources and Energy Quarterly (REQ) says that over the next three years gold production will increase by an average of 6.8% per annum and peak at 390 tonnes in 2025-2026.

At the same time, export prices for Australian rapeseed are up 72% over last year, which together with a record national harvest (6.4 million tons) could help Australian farmers earn money.

But a Beyond Bank survey showed that up to 25% of Australians are having serious financial problems, 76% are cutting back on spending on restaurants and entertainment and 23% have switched from using private cars to public transport. Along with this the Australian government plans to make a one-time payment of 250 Australian dollars from the federal government to about six million residents. A sum of 1.5 billion Australian dollars, which is included in the current budget, shall compensate citizens the rising cost of housing, food and fuel.

Today at 14:30(GMT+2), the U.S. will release its first-quarter GDP data, analysts forecast 1.1% growth. At the same time at 14:30(GMT+2), U.S. Initial Jobless Claims data will be released. Australia Producer Price Index will be released at 3:30 a.m.(GMT+2) tomorrow. At the same 3:30 a.m.(GMT+2) Australian Private Sector Credit data will also be released.

Support and resistance levels.

The AUD/USD currency pair fell below the key Fibonacci level of 76.4. The current trend is downward. The RSI oscillator has crossed level 30 from the bottom up and shows divergence.

• Support levels: 0.6975
• Resistance levels: 0.7640, 0.7482, 0.7385, 0.7305, 0.7230, 0.7130

Trading scenarios

• Short positions may be opened from the current level with target 0.6975 and stop-loss 0.7230 Implementation period: 2-4 days
• Long positions may be opened above the level of 0.7230 with target 0.7385 and stop-loss 0.7130 Implementation period: 2-4 days