AUD/USD Forex Technical Analysis – Reaction to .7499 Will Set Tone After CPI Data
The Australian Dollar is trading higher late in the session on Tuesday as traders await the release of the latest government report on consumer inflation at 00:30 GMT. The quarterly Consumer Price Index (CPI) is expected to come in at 0.8% and the quarterly Trimmed Mean CPI is expected to show a 0.5% increase.
At 18:30 GMT, the AUD/USD is at .7505, up 0.0014 or +0.19%.
Economists polled by Reuters expect the Reserve Bank of Australia’s (RBA) preferred “trimmed mean” CPI to show a 1.8% year-on-year for the third quarter. The RBA has forecast that it would hold steady at about 1.75% through to December.
The recent rise in the Aussie has been led in part by speculators betting a bigger-than-expected jump in inflation could encourage the RBA to raise rates sooner than their 2024 timetable.
An inflation figure higher than the estimate could launch a spike to the upside. A miss to the downside could encourage longs to book profits. It may even bring in some counter-trend short-sellers.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on October 21.
A trade through .7547 will negate the closing price reversal top and signal a resumption of the uptrend. A move through .7226 will change the main trend to down.
The minor trend is also up. A trade through .7454 will change the minor trend to down. This will confirm the shift in momentum.
Late in the session, the AUD/USD is straddling a long-term 50% level at .7499.
On the downside, the nearest support is a pair of 50% levels at .7463 and .7435. The latter is a potential trigger point for an acceleration into a long-term Fibonacci level at .7379.
Daily Swing Chart Technical Forecast
The direction of the AUD/USD into the close on Tuesday is likely to be determined by trader reaction to the 50% level at .7499.
A sustained move over .7499 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the main top at .7547.
A sustained move under .7499 will signal the presence of sellers. This could trigger a break into a series of levels including a 50% level at .7463, a minor bottom at .7454 and another minor bottom at .7435. Taking out the latter could trigger an acceleration to the downside.