AUD/USD rallies hard to test the 0.77 handle on solid CPI
|Currently, AUD/USD is trading in the bid at 0.7692 at time of writing, up 0.60% on the day, on the back of the CPI results having posted a daily high at 0.7702 and low at 0.7628.
The Aussie has rallied hard on the back of today's inflation figures for the Q3. These reinforce the idea the RBA can hold off from any further easing this year and offers the Aussie another life after the recent disappointment in the Aussie jobs data, arguably more of a market impacter given the RBA's recent indifference to their target rate of between 2 and 3%. However should the data have missed, even marginally, we could be looking at a much softer Aussie vs the backdrop of high stakes for a Fed hike before the year is out yet with an air of uncertainy resulting in softer commodities.
Australia's Q3 CPI beats expectations, RBA trimmed mean CPI unchanged
Main headlines of CPI
CPI headline q/q 0.7% vs 0.4% exp and 0.4% prior
CPI headline y/y 1.3% vs 1.1% exp and 1.0% prior
RBA trimmed mean 0.4% vs 0.4% exp and 0.5% last
RBA trimmed mean y/y 1.7% vs 1.7% exp and 1.7% last
AUD/USD levels
AUD/USD was recently rejected from the 0.7731 September high on the 19th September and the five month support line is located at 0.7536. 0.7580 could be a trigger for a push to there and the 2016 uptrend line at 0.7515. The 200 dma is located at 0.7610 while a break through 0.7730/60 on this releases could introduce scope to the .7836 April high.
Meanwhie, with spot trading at 0.7692, we can see next resistance ahead at 0.7699 (Daily Classic R2), 0.7702 (Daily High), 0.7702 (Weekly Classic R1), 0.7722 (Monthly High) and 0.7722 (Weekly High) and 0.7731 Sep high. Support below can be found at 0.7672 (Daily Classic R1), 0.7657 (Yesterday's High), 0.7646 (Daily Open), 0.7642 (Weekly Classic PP) and 0.7638 (Hourly 20 EMA).
Westpac bullish outlook in AUD/USD 1-3 month: " While further gains are possible, the AUD is losing energy (perhaps a reflection of its declining yield advantage). By year end, there's a case for a correction towards 0.74 if the Fed tightens in December as we expect. (13 Sep)."
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