Stagnant Australia Wage Price Index (WPI) to Fuel AUD/USD Weakness

Trading a News: Australia Wage Price Index (WPI)

Updates to Australia’s Wage Price Index (WPI) might fuel a new debility in AUD/USD as a title reading is approaching to reason solid during an annualized 2.1% in a first-quarter of 2018.

Image of DailyFX mercantile calendar

Signs of low salary enlargement might hint a bearish greeting in a Australian dollar as it encourages a Reserve Bank of Australia (RBA) to keep a record-low money rate via 2018. In response, Governor Philip Lowe and Co. might hang to a stream book during a subsequent seductiveness rate preference on Jun 6, with AUD/USD during risk of confronting headwinds forward of a assembly as marketplace participants pull out bets for an RBA rate-hike.

However, a certain growth might column adult AUD/USD as it puts vigour on a RBA to start normalizing financial policy, and a executive bank might start to change a balance in a second-half of a year as ‘further swell in shortening stagnation and carrying acceleration lapse to aim is expected.’ Sign adult and join DailyFX Currency Analyst David Song LIVE for a broader contention on stream themes and intensity trade setups!

Impact that a Australia WPI had on AUD/USD during a prior quarter

4Q 2017Australia Wage Price Index (WPI)

AUD/USD 15-Minute Chart

Image of AUDUSD 15-minute chart

Australia’s Wage Price Index (WPI) suddenly increasing for a second uninterrupted quarter, with a title reading climbing to an annualized 2.1% from 2.0% in a three-months by September.

The growth was overshadowed by a 19.4% decrease in construction work done, that noted a biggest decrease given a recordkeeping began in 1986. The Australian dollar struggled to reason a belligerent following a churned information prints, with AUD/USD harsh reduce via a day to tighten during 0.7804.

AUD/USD Daily Chart

Image of AUDUSD daily chart

  • The miscarry in AUD/USD appears to have fizzled forward of a 0.7590 (100% expansion) segment as it snaps a new array of aloft highs lows, with a Relative Strength Index (RSI) highlighting a identical energetic as a oscillator flops forward of trendline resistance.
  • A uninformed bearish method has started to take shape, with a mangle of a monthly-low (0.7412) bringing a 0.7340 (61.8% retracement) area behind on a radar, that mostly lines adult with a 2017-low (0.7329).

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— Written by David Song, Currency Analyst

Follow me on Twitter during @DavidJSong.

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