Audusd drops ahead of inflation and employment data releases

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.6%	-39.6 Pips
Week to-date	-0.83%	-54.8 Pips
November	-0.71%	-47 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD CPI Inflation Rate (12-mth)
Wed 11:00 PM AUD RBA Governor Michele Bullock speech
Thu 12:30 AM AUD Labour Force Monthly Employment Change
Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)
Thu 08:00 PM USD Federal Reserve Chair Jerome Powell speech

What happened lately

On Wednesday at 1:30 PM, the United States will release the data for the Consumer Price Index (CPI) inflation rate over a 12-month period. This is a critical economic indicator as it provides insight into the inflationary pressures within the economy which can directly influence the Federal Reserve’s decisions on monetary policy. A higher-than-expected CPI could lead to speculation of interest rate hikes, while a lower figure might hint at easing inflation, altering economic projections and policy stances.

In Australia, significant events include the speech by the Reserve Bank of Australia’s Governor Michele Bullock at 11:00 PM on Wednesday, followed by the announcement of the Labour Force Monthly Employment Change on Thursday at 12:30 AM. The employment data will provide a detailed look at the health of the Australian labor market. If employment figures surpass expectations, it might suggest a robust economy and influence potential monetary policy moves by the RBA. Conversely, weaker employment data could trigger concerns about economic slowdown and monetary easing.

Additionally, on Thursday at 1:30 PM, the United States will provide data for the Producer Price Index (PPI) excluding food and energy sectors over 12 months. This is another measure of inflation at the producer level and can provide additional insights into inflationary trends. Later that day, at 8:00 PM, the Federal Reserve Chair Jerome Powell is scheduled to speak which could provide hints on the Fed’s outlook and future monetary policy direction.

The movement of AUDUSD, which saw a drop of -0.6% to 0.65292 on Tuesday, is influenced by these forthcoming economic events. The drop can be attributed to anticipation and potential anxiety over upcoming U.S. CPI data and key speeches, which are typically high-impact events for currency markets. If the U.S. CPI figures are high, it could drive the USD stronger against the AUD, leading to a further decrease in the AUDUSD rate. However, if employment data from Australia is unexpectedly strong, it could provide support for the AUD, potentially cushioning the pair against a USD-driven rally. Investors will attentively watch these events, as both economies’ monetary policies are closely tied to such key data releases, leading to adjustments in currency valuations accordingly.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday dropped -0.6% to 0.65292. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for AUDUSD looks bearish as the pair posted lower in Tuesday trading session.

Looking ahead for the day, immediate support level is at S1 0.65013 with break below could see further selling pressure towards S2 at 0.64734. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.65817 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.65136 would indicate selling pressure.

For the week to-date, take note that AUDUSD is mixed as compared to the prior week.

Key levels to watch out:

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