
Australia Business Conditions and Confidence Jump Ahead of RBA Decision
Business conditions rose 9 points last month to the highest level in more than a year, National Australia Bank Ltd. said in a report on Tuesday. Confidence increased 3 points, its third monthly gain. Forward orders rose 2 points while capacity utilization advanced to 83.3.
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The decision, which followed cuts in February and May, surprised the financial markets that had nearly fully priced in a 25-basis-point reduction. So why did the RBA hold back when inflation appears to be easing, growth has slowed, and Australian major banks were aligned in expecting another round of monetary easing in July? Ahead of the meeting, both market participants and analysts were nearly unanimous in forecasting a rate cut. The latest consumer price data showed inflation slowing more than expected, with the monthly CPI rising just 2.1% in the year to May—down from 2.4% in April and moving closer to the RBA's 2–3% target band. At the same time, GDP data for the first quarter revealed weaker-than-expected economic activity, while soft retail sales and a cautious consumer mood pointed to a subdued domestic outlook. 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The Australian dollar has staged a modest recovery against the U.S. dollar, trading near 0.6535 at the time of writing, up approximately 0.70% on the day at the time of writing. The price is currently sitting just above the Kijun-sen (baseline) and back above the Tenkan-sen (conversion line), signaling a potential short-term rebound. More importantly, the AUD/USD Forex pair remains above the Ichimoku Cloud (Kumo), which suggests that the broader trend is still marginally bullish. However, the price continues to struggle beneath the resistance zone around 0.6580, a level that has capped rallies multiple times over the past month. The Chikou Span (lagging line) remains above the price action from 26 periods ago, but bounced back from the price with the RBA decision which supports a mildly bullish stance. The cloud ahead is relatively thin, indicating reduced momentum and a possible lack of conviction in either direction. If the pair breaks below 0.6485 and then the bottom of the cloud at 0.6446, this would shift the trend outlook decisively bearish. On the other hand, a successful breach and close above 0.6580 would confirm bullish continuation and possibly trigger upside extension toward 0.6650. The RSI is currently at 53.03, slightly above the neutral 50 threshold. This suggests that momentum is currently balanced, with neither bulls nor bears in clear control. This suggests that momentum is currently balanced, with neither bulls nor bears in clear control. The RSI's inability to break convincingly above 60 in recent rallies indicates that buyers are still hesitant, and sentiment remains fragile. For a convincing bullish continuation, the RSI would need to push above the 60–65 zone, supported by rising volume. The MACD line is nearly flat and sitting just below the signal line, while the histogram shows a series of small bars close to the zero line. This configuration reflects consolidation and indecision. The lack of a clear crossover or histogram expansion suggests that momentum is weak and a directional move has yet to fully materialize. In the wake of the RBA's decision, attention turns to the next major data release: the quarterly inflation print due on July 30. That report will likely determine whether the RBA feels confident enough to resume its cutting cycle in August or continue to wait for clearer signals. For now, the market still expects the cash rate to move lower over the coming months, but the path forward is less linear than previously assumed. The Australian dollar's path will depend not only on domestic inflation but also on how global risks—especially trade tensions—play out in the weeks ahead. So stay tuned! Sources: Wall Street Journal, RBA, ABS, Reuters, Productivity Commission, CNN, The Guardian This article was originally posted on FX Empire Vistra's Nuclear AI Option, Renewables Draw Inflows Fragile Middle East Truce Heightens Geo-political, Macroeconomic Risks, Including for Europe Stocks Playbook for Geopolitical Tensions (Overreacting is Costly) REV Group Shares Up 77% In a Year Thanks to Big Money Spot Outliers Like Hyperscaler Microsoft Early Identify Superstar Stocks Like DoorDash Before the Crowd Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data


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