Jakarta, GIC Trade – The Australian dollar depreciated towards $0.66, hitting its lowest level in six weeks after data showed that domestic inflation eased in the first quarter. Weak Australian inflation will support the RBA to hold on with the decision to keep interest rates unchanged. 
 
The Australian Bureau of Statistics reported further softening of inflation data. The quarterly (Q1) Consumer Price Index (CPI) increased by 1.4% but was lower than the previous rate of 1.9%. Annual inflation has weakened to 7.0%, slightly higher than the forecast of 6.9% but lower than the previous release of 7.8%.
 
The monthly CPI indicator slowed to 6.1% from the consensus of 6.6% and the previous release of 6.8%. A significant slowdown in Australian inflation will support the Reserve Bank of Australia (RBA) to stick to its decision to keep interest rates unchanged at 3.60%, as announced at its April monetary policy meeting.
 
Reserve Bank of Australia (RBA) officials indicated that they are determined to do whatever is necessary to bring inflation back to their target depending on incoming data. The central bank paused interest rate hikes at its April policy meeting to give itself more time to gather information. 
 
Meanwhile, the Australian dollar/aussie currency also faces pressure from strong expectations that the US Federal Reserve will tighten policy at next month's meeting.
 
Fundamentally, Australia's easing consumer price index (CPI) report indicates that the Reserve Bank of Australia (RBA) to keep interest rates unchanged at the current level of 3.60%, weakening the Aussie currency. Then how technically, see the following analysis:
 
Technical Analysis

 
AUD/USD on the 1-hour period fell further, trying to touch the support level at 0.65750 until heading towards the next support level at 0.67778. The downward trend can also be seen from the FXBot template, where the AUD figure is lower by 1.2 than the USD figure of 4.8. While the bearish bias is also supported by a sell signal indicated by a red arrow.

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