Last week we saw the NZD/USD get a real correction to the downside when they missed on CPI. Given the result, there were probably a few traders around expecting a similar week number out of Australia. Sure enough, Australian CPI missed the mark, however, the AUD/USD help up.

We’ve been battling at the top of this range for a while now and haven’t been able to push through. It might be the case that the Kiwi result has weighted a touch on the Aussie.

Regardless, we are back to virtually square on the day. While the overall result is still somewhat short of the 2-3% target band set by the RBA, it isn’t a big deal. Or at least that’s what they’ll say.

Where to for the AUD?

The biggest impact today is not going to be out of Australia. It’s the FOMC Statement. While we aren’t expecting any changes, that might be enough to continue the downtrend in the USD. That will obviously send the AUD spiking.

I’m still long-term bearish on the AUD/USD, it just so happens that the USD has been in a bit of a correction since the Trump tax reforms passed.

81.5 is a tough level to crack, but if anything will move us through it’s the FOMC or non-farm payrolls.