The AUD/USD has been a little quiet on the data front in the last few weeks, but that hasn’t stopped the price action getting very active.

Looking at the calendar this week, it appears we have some big numbers that will help drive more action.

Retail sales are due out late in the week, while CPI is coming up on Wednesday. CPI, in particular, will be important, given the dovish tone coming out of the RBA at the moment.

There appears little motivation to raise rates at all, and that is one of the key reasons for the big slide in the AUD/USD. If CPI can continue to notch higher, then the RBA might get a little more proactive.

Of course, interest rate rises aren’t exactly what the broader economy might want, but it is a sign that things are coming back to life. For the last two years, the mining sector has been slowly coming back to life, while we are now at a turning point in house prices.

So from the perspective of the RBA, rates are delicately poised.

Aussie Outlook

The AUD/USD is tested the important 0.7040 level late in the week, and price certainly rejected the lows.

The major level at 0.7000 went untouched as price quickly pulled back into the range.

The weakness in the USD was clearly the driver for the move as it pulled back of its highs.

All the focus will also be on US employment data this week as we try to gauge the state of the US economy. A strong number might be the catalyst we need to run the lows and hold.