AUD/USD drops 40+ pips as Aussie CPI data lagged behind market consensus/prior
|- Softer than expected and previous readouts of inflation data opens the gate for the RBA’s dovish comments.
- Risk events will be in the spotlight for now.
AUD/USD drops to 0.7050 just after quarterly inflation data from Australia shook Aussie during early Wednesday. The pair previously declined on the greenback strength and marker risk-off due to the return of global investors from Easter holidays.
The first quarter (Q1) 2019 inflation numbers for Australia signal weak picture of the commodity-linked economy. The headline consumer price index (CPI) grew 0.0% versus 0.2% forecast and 0.5% prior on a quarterly basis while registering a 1.3% YoY increase against 1.5% market consensus and .8% earlier.
Further, RBA trimmed mean CPI (QoQ) flashed 0.3% against 0.4% forecast and prior but the yearly facts revealed 1.6% figure compared to 1.7% expected and 1.8% previous readout.
As we have already witnessed the Aussie inflation data, market focus may shift towards the US catalysts as few signals from Australia are left to observe.
The US economic calendar seems silent for the day and has no major details to observe. However, earnings season is on its run and may keep affecting the global risk sentiments. Off-late numbers from the US giants like Twitter and Coca Cola pleased equity buyers.
Additionally, developments surrounding the US-China trade talks and any confirmations on likely break of China’s monetary stimulus could also direct near-term Aussie moves.
Furthermore, AUD/USD is also considered as a risk barometer and hence moves surrounding the US 10-year treasury yield, another indicator of market sentiment, should also be followed closely. The US yield currently remains unchanged near 2.57% but dropped almost 2 basis points on Tuesday.
AUD/USD Technical Analysis
50-day simple moving average (SMA) level of 0.7115 and 100-day SMA level of 0.7135 are likely immediate resistances ahead of the 200-day SMA level near 0.7185/90.
Alternatively, sustained break of 0.7100-0.7095 support-zone, comprising seven-week-old support-line can fetch prices to 0.7050, 0.7030 and March month lows near 0.7000.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.