AUD/USD analysis: battling around 0.7100 ahead of Q3 inflation figures

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7097

Australian Q3 inflation is expected to have risen by 0.4% in the three months to September, and by 1.9% from a year earlier.
The positive tone of worldwide equities amid decreasing trade war concerns fell short of boosting the Aussie through the key resistance.

The AUD/USD pair recovered from a daily low of 0.7051 to hit a weekly high of 0.7121. The Aussie followed the lead of equities, surging this Tuesday as US President Trump cooled down trade war concerns by stating that a "great deal" could be achieved with China on trade. Australian data, however, was mixed as September Building Permits were up 3.3% monthly basis, although the year-to-year comparison, was down by 14.1%, following a 13.6% decline in August. The country will release today Q3 inflation figures.

According to preliminary estimates, Q3 inflation is expected to have risen by 0.4% in the three months to September, and by 1.9% from a year earlier. The yearly inflation rate is currently at 2.1%, which is consistent with the central bank's target. However, not only a decline has been forecasted, but also, inflation has been a little below target for a number of previous quarters, averaging 1.8% over the past three years, somehow suggesting that the report has little chances of giving the Aussie the so much needed boost to break above the 0.7120 price zone.

The 4 hours chart for the pair shows that moving averages are directionless, with the price currently hovering around a flat 100 SMA, and well below the 200 SMA, as technical indicators ease within positive ground, indicating that buying interest is not strong enough. The pair has reached a weekly high at 0.7124 last week, with the current one at 0.7120. If the pair is unable to clearly break above it and rally, bulls will likely become discouraged, probably resulting in a downward move to fresh yearly lows.

Support levels: 0.7080 0.7040 0.7000

Resistance levels: 0.7120 0.7155 0.7190

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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