AUDUSD is leading gains among the major currency pairs in today’s trading. As of this writing, the currency pair is up by 0.31% from its opening price as it trades around 0.7170. Can the much-anticipated Australian CPI report help AUDUSD extend its gains?
Due at 2:30 am GMT tomorrow, the report is expected to show that CPI for the second quarter of 2020 fell by 2.0%. Excluding volatile items, the trimmed CPI is expected to show a 0.1% uptick for the quarter. Better-than-expected readings could be bullish for AUDUSD because rising prices would suggest improving economic conditions. On the other hand, disappointing figures could weigh down on the currency pair.
On the 4-hour time frame, it can be seen that AUDUSD has stopped short of trading past its recent highs at 0.7187. This is where the currency pair peaked on July 22 and could serve as a strong resistance. If there are not enough buyers in the market to push AUDUSD past this level, the currency pair could fall to Friday’s lows at 0.7062 where it may also test the rising trendline for support.
On the other hand, a strong close above today’s high at 0.7176 could indicate that buyers are still dominating trading. AUDUSD could then rally to 0.7265 where it may test the 200 SMA on the weekly timeframe.