I’m looking at another potential pullback on AUD/USD today, but this time taking the weak Australian CPI into account.
Do you think these nearby inflection points might hold as resistance?
Before moving on, ICYMI, yesterday’s watchlist checked out AUD/USD for a possible pullback ahead of the Australian CPI report. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Canadian headline May CPI came in line with consensus at 3.4% year-over-year from the previous 4.4% reading, the lowest since June 2021
U.S. May core durable goods orders rebounded 0.6% month-over-month after an earlier 0.3% decline, with headline reading up 1.7% vs. estimated 0.8% drop
Richmond manufacturing index improved from -15 to -7 in June vs. the estimated -12 figure
U.S. CB consumer confidence index jumped from 102.5 to 109.7 in June vs. the projected 103.9 reading, the highest level since early 2022
Australian May CPI slumped from 6.8% to 5.6% year-over-year vs. an estimated dip to 6.1%
Japanese Ministry of Finance’s vice minister Kanda says they are closely monitoring FX moves with a high sense of urgency
German GfK consumer climate index fell from a downgraded -24.4 reading in May to -25.4 in June vs. the projected -22.9 figure
Price Action News
Commodity currencies like the Aussie and Kiwi returned their previous day winnings and then some, as the downbeat Australian CPI dampened hopes for another RBA hike in July (an outcome previously discussed in our Event Guide).
Other higher-yielding currencies gave up a bit of ground on risk-off flows while the yen and dollar caught some bids.
Threats of yen-tervention when USD/JPY reaches the 145-150 zone appear to be keeping a lid on yen declines while stronger-than-expected U.S. data continues to provide support for Treasury yields and the U.S. currency.
Upcoming Potential Catalysts on the Forex Economic Calendar:
Central bank heads Lagarde, Ueda, Powell, and Bailey to speak in the ECB forum starting at 1:30 pm GMT
EIA crude oil inventories at 2:30 pm GMT
Use our Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
AUD/USD: 15-min
It looks like Aussie bears have regained the upper hand lately!
AUD/USD fell through the floor around .6670 and is now in pullback mode after bouncing off the latest lows.
The Fibonacci retracement tool reveals that the former support area is spanned by the 50% to 61.8% levels, which are just slightly above S1 (.6660).
A shallow correction might even find sellers at the 38.2% Fib closer to the .6650 minor psychological mark. If any of these hold as a ceiling, AUD/USD could fall back to the swing low again.
On the other hand, a strong surge in risk-taking could propel the pair back up above the Fibs and onto the swing high that lines up with R1 (.6720).
Better keep your ears peeled for remarks by Fed head Powell during the ECB Forum when trading this dollar pair!
