AUDUSD is up on the day as it currently trades above the 200 DMA, ahead of the key CPI figures from Australia. The price action is also testing the underside of the trend line around the $0.6860 mark.
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CPI data is out tonight as market forecasts 0.5% increase compared to 0.6% in the previous quarter. On an annual basis, market analysts expect CPI at 1.7%, compared to 1.6% reported during the previous reporting period. Most importantly, trimmed CPI is expected at 0.4%.
“Despite Q3 typically being a seasonally solid month for Australian CPI, Citi analysts headline CPI forecast is around half the average print at 0.5% to produce a yearly CPI result of 1.06%,unchanged from Q2. Citi’s forecast for the more important trimmed mean CPI is 0.4%, leaving it just short of RBA’s August SMP forecast,” it is noted in Citi’s preview.
In the meantime, AUDUSD is up against the resistance at $0.6860. The 100 DMA comes at $0.6850. A close above these two levels will pave the way for more substantial gains for the Aussie. On the other hand, disappointing CPI figures may lead to a third attempt to break the important $0.6770 support level.Download our latest quarterly market outlook for our longer-term trade ideas.
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