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28 Jan 2015
AUD/USD: Aus CPI spike hits wall of offers at 0.80
FXStreet (Bali) - AUD/USD has eased off its weekly high after breaking, if only fractionally, 0.80 psychological level, following better-than-expected RBA trimmed mean Q4 CPI data, with the exchange rate presently around 0.7975/80.
While the Q4 CPI headline numbers came slightly below expectations, it is the RBA trimmed mean that the market pays the most attention, and with the core figures having jumped to +0.7% in Q4 against a +0.5% expected, it will likely make the RBA more cautious to ease. The swaps market is reflecting that, pricing a 12% chance of a cut now vs 43% pre-CPI release.
Technically, AUD/USD faces key resistance around the 0.80 round number, with some market sources noting cluster of trailing buy stop loss orders starting above 0.8040. On the downside, 0.7970, previous day high is being used as reference now for support, ahead of potentially deeper setbacks towards 0.7950, 0.7930. Traders are unlikely to remain overly committed on entering fresh positions ahead of the FOMC later today, due at 19 GMT.
While the Q4 CPI headline numbers came slightly below expectations, it is the RBA trimmed mean that the market pays the most attention, and with the core figures having jumped to +0.7% in Q4 against a +0.5% expected, it will likely make the RBA more cautious to ease. The swaps market is reflecting that, pricing a 12% chance of a cut now vs 43% pre-CPI release.
Technically, AUD/USD faces key resistance around the 0.80 round number, with some market sources noting cluster of trailing buy stop loss orders starting above 0.8040. On the downside, 0.7970, previous day high is being used as reference now for support, ahead of potentially deeper setbacks towards 0.7950, 0.7930. Traders are unlikely to remain overly committed on entering fresh positions ahead of the FOMC later today, due at 19 GMT.