Trade the Aussie Dollar on the Australian CPI Data

Australian dollar traders are preparing for significant moves in the currency this morning as the Australian Bureau of Statistics releases its latest key CPI data. The Reserve Bank of Australia has been the last major central bank to cut rates in the current cycle and has yet to pull the trigger, much to the frustration of Australian households and some politicians alike. The primary reason for this hesitation has been persistently high inflation. The market is pricing in a 0.3% increase in the crucial quarterly data, with the year-on-year figure expected to drop to 2.3%. Traders anticipate strong market movements if the data deviates from these expectations.

The Aussie dollar has been under pressure for the past four weeks since peaking in late September just below 0.6950. A combination of U.S. dollar strength and global uncertainty has contributed to pushing the ‘battler’ down by over 5%. It is now sitting at levels not seen since mid-August, and weaker numbers could raise hopes of a rate cut, potentially driving the dollar back toward annual lows. Stronger data could lead to a relief rally; however, given the current trend, most traders are likely to use any rally as an opportunity to sell and may prefer to buy the Aussie on the crosses.

Resistance Levels:

• Resistance 2: 0.6645 – 200-Day Moving Average
• Resistance 1: 0.6620 – Trendline Resistance

Support Levels:

• Support 1: 0.6543 – Overnight Low and Trendline Support
• Support 2: 0.6392 – Long-Term Trendline Support

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