AUD/USD bulls engage and target a higher high on CPI day

  • AUD/USD is building a bullish case ahead of CPI. 
  • Aussie CPI could be make or break time for the near term for AUD.

AUD/USD has been trading in firmer hands towards the North American close and has travelled from a low of 0.7484 to a high of 0.7525 on the day. The market's attention will now turn to the Asian sessions key data in the Australian third quarter Consumer Price Index. It will then it’s in the hands of the RBA next week. 

Commodity prices were higher again on Tuesday with the CRB Index by 0.25% which has helped the Aussie keep its head above water. AUD/USD traded above $0.75 against the greenback for the first time since July. This happened despite the US dollar edging up on Tuesday. Traders are awaiting news from upcoming central bank meetings that might attract some forex volatility.

Meanwhile, a report showed that US consumers were more confident about the economy than expected. This gives rise to a higher US dollar when considering the effect consumer confidence at the highest of the covid 4th wave had on the greenback.  For now, the US dollar is between its one-year high that was reached earlier this month and the one-month low touched early on Monday. 

AUD's domestic risks

Domestically, the risks for AUD stay with the Evergrande story in China which appears to have taken a less concerning path, and this has clearly benefited the highly exposed AUD. However, it is unlikely that there can be any more - significant upside room for AUD on the back of improving sentiment in China. Instead, the Aussie currency with face today's 3Q CPI data out of Australia.

Traders are bracing for deceleration from the 3.8% 2Q figure as Covid restrictions generated some deflationary pressures in late summer.  Consensus is reported at 3.1% for the headline rate, but given the massive surprise in New Zealand’s very strong (4.9%) read for the same quarter, there could be some follow-through here for Australia. If there is a disappointment, however, this will underpin the RBA’s dovish stance and likely weigh heavily on the Aussie, sending AUD/NZD back into its consolidation depths and AUD/USD back into a correction of the current bullish impulse on the daily chart.

AUD/USD technical analysis

As seen in the chart above, the 50% mean reversion has acted as support and the price is building a bullish case from here. However, a break of support will open risk back towards 0.7350 again. 

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD climbs above 1.1250 as investors eye coronavirus headlines

EUR/USD preserved its recovery momentum early Friday and rose above 1.1250 during the European trading hours. Markets are doubting the Fed's policy tightening prospects as the new coronavirus variant revives concerns over the economic recovery losing steam.


GBP/USD rebounds toward mid-1.3300s on broad dollar weakness

GBP/USD reversed its direction after dipping below 1.3300 earlier in the day and started to push higher toward 1.3350. The greenback is facing heavy selling pressure amid the sharp decline witnessed in the 10-year US Treasury bond yield.


Gold clings to strong gains above $1,800 as US T-bond yields plunge Premium

Gold staged a decisive rebound on Friday and reclaimed $1,800. The intense flight to safety is causing US Treasury bond yields to fall sharply and fueling XAU/USD's rally. Investors await news on vaccines' effectiveness against the new COVID variant.

Gold News

Cardano could tank to $1 if ADA fails to defend crucial support

Cardano price is currently hovering below a freshly shattered 6-hour demand zone, ranging from $1.68 to $1.79. This resulting crash could extend to the immediate and critical foothold at $1.40. 

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!