A senior RBA official warned on Thursday that the longer the conflict in the Middle East persists, the greater the damage to the economy, and policymakers must ensure that soaring energy prices do not destabilize inflation expectations. Christopher Kent, Assistant Governor of the RBA, said in a speech in Sydney that the situation in the Middle East has led to tighter financial conditions, while supply shocks have further increased inflation risks. He noted that while the central bank cannot change this situation, "what we want to avoid at the bank is rising longer term inflation expectations that comes from oil price increases and other commodity price increases." Currently, Australia's inflation level remains high. Even before the Iran conflict disrupted global oil trade and caused domestic gasoline prices to soar to record highs, the RBA had raised interest rates for two consecutive months this month, pushing the rate to 4.1%. This tightening move reversed two of the three rate cuts from last year, but Kent did not explicitly state whether the current monetary policy is restrictive. Kent indicated that assessments have become unclear due to the downward revision of the 2025 cash rate target and further upward adjustments to neutral rate estimates by various models. Models focusing more on the short-term neutral rate have raised interest rate expectations by approximately 20 to 30 basis points in recent quarters. The central bank views the post-pandemic peak rate of 4.35% as overly restrictive and is currently committed to slowing demand growth through policy.  

Weekly, the Bollinger Bands begin to narrow. Following consecutive upper shadows, a bearish candle has broken below the EMA12, signaling a potential downtrend. The MACD lines are about to form a death cross, and bullish momentum is weakening, indicating that while the trend has not changed, a pullback may occur. The RSI is at 56, placing the market in a wait-and-see zone. Support lies near the Bollinger Middle Band. From a daily perspective, the Bollinger Bands are opening downwards, moving averages are diverging downward, and the price action has entered a bearish phase. The MACD lines plunge below the 0-axis, and the death cross continues. Meanwhile, the RSI is at 39, with lower highs forming gradually. In the short term, the price is likely to fall towards the EMA200 and the psychological level, specifically around 0.673 and 0.680, respectively. Therefore, selling at highs is recommended.

Trading direction: Sell

Entry Price: 0.692

Target Price: 0.67

Stop Loss: 0.715

Support: 0.63/0.68/0.67

Resistance: 0.715/0.737/0.75