AUD/USD technical analysis: Prints fresh session low on below-forecast Aussie wage growth data

• AUD/USD hit fresh session lows on weaker-than-expected Aussie wage price inflation. 
• The currency pair is creating a bullish divergence of the RSI on the hourly chart. 

AUD/USD slipped to fresh session low of 0.6925 after the Aussie first quarter wage price index printed below estimates, cementing expectations of an RBA rate cut in the second half of this year. 

Australia’s Wage Price Index rose 0.5% quarter-on-quarter in the first three months of this year, missing the expected rise of 0.6%. In annualized terms, the Wage Price Index rose 2.3% as expected. 

Anemic wage growth in the first quarter means spending (demand-pull inflation) will likely remain subdued in the current quarter. The increased downside risks to inflation will likely put pressure on the RBA to cut rates. 

The Aussie dollar, however, is showing resilience. The currency pair has recovered from 0.6925 to 0.6935, creating a bullish divergence of the RSI on the hourly chart. 

That pattern indicates scope for a stronger corrective bounce, which may remain elusive if China’s industrial production and retail sales, due in few minutes, prints below estimates. 

Hourly chart

Trend: Oversold bounce

Pivot points