AUD/USD Price Analysis: Levels to consider before Aussie CPI

Aussie Q4 CPI is out at 11:30am AEDT, as the main event today.
Expectations are for the Trimmed Mean (RBA's focus) to print 0.4% QoQ (prior 0.4% leaving YoY at 1.5% (prior 1.6%)).
AUD/USD hugging a 161.8% Fibonacci extension level ahead of CPI.

Ross J Burland FXStreet

The Reserve Bank of Australia forecasted trimmed mean inflation to come in at 0.4% and 1.6% YoY, which had been published in the SoMP. However, the key focus will have been on the Aussie jobs data back on the 23rd which showed glimmers of positives considering the trend in a falling unemployment rate. The data boosted the Aussie into buy stop liquidity, an area forecasted ahead of the data, before the market changed course on risk-off flows and a stronger greenback.

An inline CPI result today could give the bulls some buying power and protect the price from slipping further, especially when considering the divergence between momentum and price action on the hourly charts as well as a bullish development on the daily chart in the same regard following a bullish pin bar overnight. However, the most that could be hoped for is a bullish correction back to 0.68 the Figure and buy stop liquidity slightly beyond (0.6830s).

Bullish CPI: 0.6813 comes in as a prior 61.8% Fiboretracement target of the prior downside impulse

AUD/USD can move back to the 0.68 handle. Should support hold in the 0.68 handle and prior support before the next impulse to the downside.

61.8% of recent downside impulse comes in 0.6790

The 61.8% Fibonacci may come as a resistance ahead of 0.68 handle. It is also worth noting that should the data not be a catalyst for significant price action, so long as the data is in line with the RBA's forecasts, a bullish scenario, then the price may take some time to grind higher into buy liquidity in the 0.68 handle ahead of the RBA meeting, 4th Feb.

Bears target 0.6700/20

In a bearish scenario, should CPI deteriorate significantly, there has been enough of a correction to see the bears take the price down to a -27.00% Fib target of 0.6714 and 0.6700 psychological number with a confluence of the Sep-Oct support-structure.

0.6780 comes in as a 61.8% Fibonacci retracement target of the prior downside impulse.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.