Where Is the Aussie Heading After the Australian CPI Inflation?
AUD/USD has been sliding lower since the middle of July, owing mostly to a stronger US dollar, but also to global worries that have driven traders away from risk assets, such as the significant issues that China’s economy has suffered this year across a range of industries. Following a drop in Chinese Caixin services and manufacturing earlier this month, which sent the price of AUD/USD below 0.63, the AUD/USD recovered but it has failed to make higher highs, so the trend still remains bearish despite slowing down.
Today we had the consumer inflation (CPI) report from Australia for Q3 and the market seems concerned after New Zealand’s inflation statistics came in significantly below forecasts last week. Intraday, the AUD/USD is forming a bearish wedge, with lower highs and a support zone below 0.63. A break above or below the 0.6380 level would result in a breakout or breakdown. A move higher towards the 0.6422 level is likely on a breakout, while a move down towards the 0.6180 level is conceivable on a breakdown.
AUD/USD H4 Chart – A Triangle is Forming
We’re likely to see a bearish break to the downside
The RBA Minutes were unusually hawkish, and it appears that the central bank may squeeze in another rate rise if underlying inflation does not decrease quicker in the coming months, thus today’s inflation report was scrutinized.
Q3 Consumer Price Index Inflation Report from Australia
- CPI QoQ 1.3% vs. 1.0% expected
- Q2 CPI QoQ was 1.0%
- CPI YoY 5.2% vs. 5.0% expected
- Previous CPI YoY was 5.5%
AUD/USD Live Chart
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