Australian CPI overview
Early on Wednesday at 01:30 GMT will see 2019's first quarter inflation data dump for the Australian economy, and the headline q/q CPI reading is expected to come in at 0.2% versus previous quarter's reading of +0.5%.
The Reserve Bank of Australia's (RBA) trimmed-mean CPI is also expected to arrive at 0.4%, steady from the previous period's 0.4%, while the annualized CPI is expected to show 1.7%, a soft decline from the previous 1.8%.
Ahead of the release, TD Securities said:
We expect 1.8% y/y for headline CPI (mkt +1.5%) and +1.75% for core (mkt 1.65% y/y). Tobacco, Housing and Health are the main contributors, the main drag from Transport (i.e. fuel (-10% q/q)) and Communication (-0.3% q/q). Annual core inflation at 1¾% y/y leaves the RBA on the sidelines but a significant downside miss (of around -½%pt) has been a trigger for a cut before (May 2016). Also released is skilled vacancies for March. This measure was solid, but dipped in February.
How could it affect the AUD/USD?
According to FXStreet's own Valeria Bednarik, weak inflation numbers could see the AUD/USD pair testing 0.7000 mark. She further adds:
The 4 hours chart shows that the pair broke below all of its moving averages, while the 20 SMA already crossed below the 100 SMA, both some 40/50 pips above the current level. The Momentum indicator has pared its decline at its lowest in a month, while the RSI indicator maintains its downward strength, currently at 26, both supporting additional declines ahead, to be confirmed with a break below the 0.7050/60 price zone, where the pair has multiple intraday lows from last March.
Support levels: 0.7055 0.7020 0.6980
Resistance levels: 0.7115 0.7140 0.7170
Key Notes
AUD/USD Analysis: weak inflation could see the pair testing 0.7000
AUD/USD remains close to 0.7100 support-line ahead of Australia inflation data
About the Australian CPI
The Consumer Price Index released by the RBA and republished by the Australian Bureau of Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services . The purchase power of AUD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or Bearish).
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.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.