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AUD/USD Forex Technical Analysis – Hot US Inflation Report Will Put .5980 on Radar

By:
James Hyerczyk
Updated: Oct 13, 2022, 08:36 UTC

U.S. consumer inflation figures (CPI) are expected to reinforce bets that the Federal Reserve will continue to tighten policy aggressively.

AUD/USD

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The Australian Dollar is trading flat shortly before the release of a key U.S. consumer inflation report at 12:30 GMT, where another high reading could give the U.S. Federal Reserve more flexibility to raise rates. This could shake up global risk sentiment, while fueling additional selling pressure on the Aussie.

At 08:11 GMT, the AUD/USD is trading .6275, down 0.0002 or -0.03%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $62.11, up $0.01 or +0.02%.

U.S. consumer inflation figures (CPI) are expected to reinforce bets that the Federal Reserve will continue to tighten policy aggressively. Core inflation is projected to rise 6.5% year-on-year in September, compared with a gain of 6.3% the previous month.

With the Federal Reserve likely to continue to raise rates aggressively and the Reserve Bank of Australia (RBA) not likely to keep pace, we see further downside potential for the Aussie over the near-term. Furthermore, the U.S. Dollar is expected to continue to strengthen until investors get some rate certainty from the Fed.

Daily AUD/USD

 Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6236 will signal a resumption of the downtrend. A move through .6548 will change the main trend to up.

Momentum may be getting ready to shift to the upside, given Wednesday’s closing price reversal bottom. This won’t change the main trend to up, but it could trigger the start of a 2 to 3 day counter-trend rally. A trade through .6299 will signal the change in momentum.

The minor range is .6548 to .6236. Its 50% level at .6392 is the nearest resistance. The major resistance is the Fibonacci level at .6466. This is controlling the long-term term direction of the AUD/USD.

Daily Swing Chart Technical Forecast

Trader reaction to .6268 is likely to determine the direction of the AUD/USD on Thursday.

Bearish Scenario

A sustained move under .6268 will indicate the presence of sellers. The first downside target is this week’s low at .6236. Taking out this level will reaffirm the downtrend. This could trigger an acceleration to the downside with the next target the April 3, 2020 main bottom at .5980.

Bullish Scenario

A sustained move over .6268 will signal the presence of buyers. Taking out .6299 will shift momentum to the upside. This could trigger a short-term acceleration into the minor pivot at .6392.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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