FX traders are preparing for a busy day today with a plethora of tier 1 macroeconomic data releases due across the trading sessions. First off is the Australian CPI numbers, due out early in the Asian session. This data is a potential game-changer for the Aussie, with the market split on whether the RBA will hike rates as its next move or hold firm before entering an easing cycle, in line with most other major central banks. The quarterly update is also due out today, and any significant deviation from expectations will likely see the Aussie break out of its recent tight range.
Expectations are for the quarterly number to show a 1.0% increase; however, the focus will be on the year-on-year data, which has remained sticky and has some market participants anticipating a rate hike. Expectations here sit at a 3.8% increase, down from last month’s 4% print but still substantially higher than the RBA would like to see. The Aussie has been under pressure against the US dollar since mid-July, and a lower print today could see it break through recent lows near 65 cents and then challenge the yearly low if momentum persists with a stronger greenback. Alternatively, a stronger result could see it jump back into the range and push towards initial resistance at the 200-day moving average near 66 cents. Traders should be aware, however, that we have the FOMC meeting later today, and these moves could be either short-lived or heavily reinforced later in the trading day.
Resistance Levels:
- Resistance 2: 0.6775 – Trendline Resistance
- Resistance 1: 0.6591 – 200-Day Moving Average
Support Levels:
- Support 1: 0.6420 – Trendline Support
- Support 2: 0.6267 – 2024 Low
