AUD/USD Forecast: Focus on Australian Q3 inflation data

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.7131

Australian inflation is expected to have picked up in the third quarter.
Gold prices got to post a modest intraday advance, remain close to 1,900.00.
AUD/USD remains neutral in the near-term, bulls have better chances on a break above 0.7170.

The AUD/USD pair has posted modest gains this Tuesday, trading ahead of the Asian opening around 0.7140. The modest advance could be attributed to persistent dollar’s weakness, which helped its major rivals hold ground. Gold posted a modest intraday advance, while US equities closed mixed and not far away from their opening levels. The bullish potential, in the meantime, is being limited by the latest RBA Meeting’s Minutes, which suggested that policymakers will cut rates in their next meeting.

Australia will release Q3 inflation figures this Wednesday. The quarterly CPI is expected at 1.5%, quite a recovery from the previous -1.9%. When compared to a year early, it is expected to recover from -0.3% to 0.7%. The Trimmed Mean CPI from the Reserve Bank of Australia is expected at 0.3% QoQ from -0.1%, and at 1.1% YoY from 1.2% in Q2. A significant improvement expected that anyway falls short of RBA’s 2-3% target band.

AUD/USD short-term technical outlook

The AUD/USD pair retains a neutral stance in the near term, as it remains below the 0.7200 figure. The 4-hour chart shows that technical indicators continue to lack directional strength, with the Momentum stuck around its midline and the RSI within positive levels. The price is above the 20 and 100 SMAs but would need to advance at least above 0.7170 to become more attractive to bulls.

Support levels: 0.7110 0.7065 0.7020

Resistance levels: 0.7170 0.7210 0.7260

View Live Chart for the AUD/USD

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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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