A month ago a flat trend in the range of 1,5700-1,5885 AUD was formed. The euro is still under pressure due to the slowdown in the eurozone's economy, which also does not contribute to the change in the soft monetary policy pursued by the ECB. The latest data continues to show a weak growth in the EU economy, at a slightly less modest pace than expected by investors. Business activity is decreasing amid fears of rising tensions in trade relations, affecting the PMI index of business activity in the services sector which fell by 0.2 points in July to 54.2. The GDP in July rose by only 0.3%, which is slightly less than expected.
On the other hand, the Australian dollar received support this week due to strong macroeconomic statistics. First of all, here should be noted that the surplus in the trade balance increased by 158% compared to the previous period, to 1.873 AUD, which has been achieved thanks to a significant increase in exports to China. Moreover, this is the highest level for the last 13 years and twice higher than it was expected for July. Exports grew by 3%, while imports fell by 1%, which will support the balance in the positive range in the future. A week earlier we learned that in Australia the inflation rate for the second quarter amounted to 2.1%. Such data should please the RBA in connection with the achievement of target levels. Retail sales in July were also higher than expected. In general, over the past month we noticed signs of improvement in the economic situation in Australia.
Next week Australia will remain in the focus of investors in connection with the upcoming RBA meeting. Most likely the RBA will take a wait-and-see position, noting the good perspectives for the Australian economy in the future and the risks associated with the development of the trade war between the US and China. As a result, perspectives for the rate change will remain uncertain, which can negatively affect the AUD rate. In this situation, the most optimal would be the deals to BUY. At the same time, the rates will continue within the flat trend, deviating up from the support line. Oscillators (MACD, Stochastic) also signal about the efficiency of the deals to BUY.
