Aussie Jumps on Hawkish RBA Mins
AUD Bouncing Midweek
The Aussie is benefiting firmly from the USD weakness we’ve seen over the last 24 hours with the pair rising to two-week highs today. Hawkish signals from the RBA have helped revive AUD demand this week with the RBA minute showing that policymakers remain highly concerned with the cost-of-living crisis and stickiness in inflation. As such, the door remains open for further tightening and traders are already pricing around a 30% chance of a hike next month and slightly more than 50% chance of a hike in December. Obviously, any strength in incoming data, particularly inflation data, should see that pricing rise, further boosting the Aussie near-term.
US Inflation Data on Watch
Today, focus will be on US inflation data which has the potential to help further lift AUDUSD if we see an undershooting in CPI data. With market pricing for a December Fed hike around 70%, there is plenty of room for this pricing to fall if we see a weak print today. On other hand, if the data comes in hot, this pricing should jump above 80%, boosting USD and capping the AUDUSD recovery. Aussie employment data and US PPI will then be the key readings to watch over the remainder of the week.
Technical Views
AUDUSD
The sell off in the Aussie has stalled for now into the .6924 level with price now bouncing higher again. While this level holds, focus is on a recovery towards the .7153 level and a retest of the broken bear channel. If we break lower again, however, .6866 is the next bear target to note below current lows.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.