Inflation cooling down in Australia
29 March 2023
The calendar today is not really busy which doesn’t surprise, as the whole week is rather empty. I guess we had enough thrill and emotions last week, right? The only important number has already been published and it was the inflation from Australia that came much lower than expected (6.8% vs 7.2% exp). It also marks a decline compared to the number reported in the previous month (7.4%). A piece of positive news for everyone tired of the constantly rising prices, but a bad one for the Australian Dollar who is currently one of the weakest currencies on the market.
The weakest one on Wednesday morning is the Japanese Yen. A few hours ago, we had some comments from Japan’s finance minister Suzuki and the BOJ Governor Kuroda. We also heard a few words from the BOJ Deputy Governor Uchida, but none of it was shocking or extraordinary. It seems that the biggest driver of Yen’s weakness is the general risk ON mode currently seen on the market, triggering a correction on the safe haven assets.
Speaking of safe havens, gold is also going lower today. Last week, we had two unsuccessful attempts to storm the 2000 USD/oz barrier. It seems that buyers have had enough and will most likely abandon this idea, which may start a bigger bearish correction. Another major commodity - oil - is doing pretty well. The reversal that started previous Monday is following the bullish plan. Brent reached the long-term down-trendline, where we are going to see a real test of the sentiment. A bounce will give us a signal to sell and a breakout will give us a signal to buy.
Indices enter Wednesday close to the weekly highs. S&P 500 is trading on the mid-term down-trendline and DAX is aiming for a key horizontal resistance on the 15250. A breakout of the two resistances would be an amazing signal to go long. An interesting setup can be spotted on the USDJPY who created an inverse head-and-shoulders pattern. Today, the price managed to break the neckline and the mid-term down-trendline, which is a positive sign and gives us a buy signal for the forthcoming days.