Australian CPI and the AUD/USD

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Though the AUD has been consistently weak against the USD since May, in the past week it broke out, possibly setting the pair up for a bullish run. The AUD/USD broke the trendline around 0.920 and is waiting for a reason to move to the north.

One reason could be given today depending on the volatility of the release: the Australian CPI (Consumer Price Index).

Every month the CPI is released, displaying the change in the price of goods and services that are purchased by consumers in a given month.

In the first quarter of the year, Australian’s CPI fell short of it’s 0.7% forecast, coming in at 0.4% instead.

Economists are expecting that today’s figure be 0.5%. Depending on the deviation of the actual figure, volatility is definitely a possibility. Today will also hold the release of the Australian ‘Trimmed Mean CPI’, a CPI report excluding the most volatile 30% of purchased items.

Shortly after, the Chinese Flash Manufacturing PMI will likewise be released to the public. After falling three readings in a row, markets are not anticipating much change this week in China’s manufacturing figures. The report is still worth watching and is relevant to the AUD/USD because of the strong trade relationship between Australia and China. All of these news events have the potential of affecting the AUD/USD this week.

For news updates and more fundamental analysis, follow me on Twitter. Follow the Winner’s Edge account, Casey’s twitter account, Nathan’s twitter account, and Tim’s twitter account too for Forex analysis, and trade ideas!

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