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27 Apr 2016
Aussie CPI preview - what to expect in AUD/USD?
AUD/USD has been supported on a rally in commodities this week and is on a bullish position as we head into the CPI data for Q1.
AUD/USD has recovered from below the 0.77 handle and rallied right up to 0.7765 overnight on the back of a surge in industry metals, oil and gold. We have settled back a touch in early Asia around the pivotal 50 sma on the 4hr sticks ahead of big risk factors in both the Fed (today) and BoJ coming up shortly.
However, for the meantime, we have the key Q1 CPI form Australia today that will be released at 11:30am Syd/9:30am Sing/HK. Analysts at Westpac are expecting a modest 0.4% q/q gain, matching the rise seen in Q4 who noted that the median forecast is 0.2%.
"March is a seasonally softer quarter and in 2016 will have the added impact of falling petrol and fruit prices. However, due to the previous depreciation in the AUD we expect the seasonal fall in clothing&footwear, household contents and recreation to be somewhat less than it usually is. Housing costs remain key to inflation."
Their forecast for core inflation, the average of trimmed mean and weighted median, is 0.6% (consensus 0.5%). "This would bring the annualised measure to 2.0%, at the bottom of the RBA's inflation target band."
AUD/USD levels to monitor
The 17th of June 2015 0.7849 level remains a key upside target level as the 38.2% retracement of move down from 2014 to 0.7836 (this years high to date). While trading around the 50 sma on the 4hr sticks (0.7744), a break higher brings in the 0.78 handle as a key psychological target ahead of the outcome of the Fed. the downside opens up the mid-March high at 0.7680 ahead of the two-month support line that can be seen at 0.7656.
AUD/USD has recovered from below the 0.77 handle and rallied right up to 0.7765 overnight on the back of a surge in industry metals, oil and gold. We have settled back a touch in early Asia around the pivotal 50 sma on the 4hr sticks ahead of big risk factors in both the Fed (today) and BoJ coming up shortly.
However, for the meantime, we have the key Q1 CPI form Australia today that will be released at 11:30am Syd/9:30am Sing/HK. Analysts at Westpac are expecting a modest 0.4% q/q gain, matching the rise seen in Q4 who noted that the median forecast is 0.2%.
"March is a seasonally softer quarter and in 2016 will have the added impact of falling petrol and fruit prices. However, due to the previous depreciation in the AUD we expect the seasonal fall in clothing&footwear, household contents and recreation to be somewhat less than it usually is. Housing costs remain key to inflation."
Their forecast for core inflation, the average of trimmed mean and weighted median, is 0.6% (consensus 0.5%). "This would bring the annualised measure to 2.0%, at the bottom of the RBA's inflation target band."
AUD/USD levels to monitor
The 17th of June 2015 0.7849 level remains a key upside target level as the 38.2% retracement of move down from 2014 to 0.7836 (this years high to date). While trading around the 50 sma on the 4hr sticks (0.7744), a break higher brings in the 0.78 handle as a key psychological target ahead of the outcome of the Fed. the downside opens up the mid-March high at 0.7680 ahead of the two-month support line that can be seen at 0.7656.