Bradley Gilbert
Traders4Traders
Today is the start of a big run of economic data but none more important for the AUD then today’s CPI data.
Forecasts have it as a tricky situation with Q/Q forecasts to be stronger then previous quarter whilst Y/Y is expected to fall.
Now usually we are looking for both weaker or stronger numbers on both so today’s data is a bit of an anomaly.
Australia’s Q/Q CPI data has been showing signs of fatigue for sometime so a negative print wouldn’t surprise me at all. Sell AUD!
Later today we also have the ‘extremely’ important FED meeting & statement. Any signs of a steady USD or hawkish sentiment on US rates and the USD will ally through the roof.
I think this may be wishful thinking but if we get congruence with weak Aust CPI data and a Hawkish FED then we can expect at least a 200 point move down in the AUD with a more sustained downtrend to follow.
Why Weaker numbers are preferred?
Weaker numbers lead to a potential cut by the RBA whereas stronger numbers have no potential chnage to rates. So a weaker result builds in a rate cut by the RBA and this is the best trading side for mine.
Trade Idea: I’m inclined to go with a stop entry on the downside pre-Aust CPI data release. I’ll also be looking to trade live in case it is a BIG weak number.
Good Luck
Brad
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