• Australian Q3 CPI  is seen recovering after record lows in Q2.
  • Investors cautious as the RBA paved the way for a fresh rate cut.
  • AUD/USD is technically neutral above the critical 0.7000 threshold.

Australia will release Q3 inflation figures early 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 that falls short of RBA’s 2-3% target band.

The Minutes of the latest central bank’s meeting showed that policymakers are inclined to follow current inflation that their own forecasts, which means that there’s a good chance that the market will rush to price in RBA’s possible reaction to inflation figures. Should the numbers miss the market’s expectations, a cash rate cut to 0.1% could be taken for granted for the upcoming meeting, on November 4, with AUD/USD probably falling towards the 0.7000 figure.

However, the market is expecting better-than-previous numbers, based on easing restriction in Victoria’s area. Despite the RBA paved the way for a rate cut, policymakers’ perspectives are generally positive. They keep reaffirming that the economic slowdown was not as bad as initially estimated. In this scenario, upbeat figures could provide support to the Australian dollar. Still, the aussie has a limited bullish potential, amid caution ahead of the next RBA meeting.

AUD/USD Technical outlook

From a technical point of view, the AUD/USD pair is neutral in the mid-term, holding above the 0.7100 figure. The daily chart shows that the pair has spent the week confined to a tight range defined by horizontal 20 and 100 DMAs. Technical indicators, in the meantime, head nowhere around their midlines.

The same chart shows that the pair bottomed at 0.7005 in September and at 0.7020 this October. An intermediate support level is 0.7070, with a break below this last exposing the 0.7000 area. To the upside, 0.7160 is the first resistance level, ahead of the 0.7210/40 price zone.


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.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD hits highest since September amid upbeat mood

EUR/USD has surpassed 1.1920, the highest in around 10 weeks as markets cheer the US transition and upcoming vaccines. A busy data day awaits traders ahead of the Thanksgiving holiday. 


XAU/USD stages a modest recovery from multi-month lows

Gold witnessed some short-covering move on Wednesday from the $1800 mark. COVID-19 vaccine optimism might cap any strong gains for the safe-haven metal. Investors now eye US macro data, FOMC minutes for a fresh directional impetus.

Gold news

GBP/USD advances toward 1.34 amid Brexit hopes

GBP/USD is rising toward 1.34 after EC President von der Leyen said there is progress in Brexit talks. UK Chancellor Sunak's speech and US data are awaited later in the day.


WTI rally continues despite large US inventory build

Oil has climbed to fresh multi-month highs, extending Tuesday's price gains as optimism emanating from potential coronavirus vaccines overshadows inventory build-up in the US. The API reports a large buildup of inventories in the weeke ended Nov. 20.

Oil News

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info

Forex Majors