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.
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