AUD/USD – Hovering around mid-0.7100; Spotlight on Australia’s CPI

The Australian Dollar rallied back above its overnight lows at 0.71129 to finish the New York session at 0.7160, modestly up from yesterday’s 0.7150. After trading to April 2019 highs at 0.7183 last week, the Aussie remains supported above the 0.7050 level. Despite a bounce in the US Dollar against most of its rivals, the sentiment toward the Greenback remains negative. Which is keeping the Aussie Battler buoyant near recent highs.

Today’s Australian Business Insider reports that Victoria recorded 384 coronavirus cases on Tuesday with six deaths, four of them from aged care facilities. New South Wales, the country’s largest state recorded 14 new cases with the popular Potts Point area of Sydney emerging as a possible hotspot.
Traders will keep a wary eye out on further developments on this front.

AUDUSD Daily Chart - IG DailyFX - 29 July 2020
AUD/USD Daily Chart – IG DailyFX – 29 July 2020

Australia’s Q2 Headline CPI is expected to slump to -2.0% from Q1’s +0.3%. The RBA’s preferred Trimmed Mean CPI is forecast to drop to +0.1% from +0.5%. Any falls larger than what is expected will see an Aussie pullback. An upbeat report could see a test of the 0.7200-10 resistance level. If the numbers come out as forecast, the Aussie will likely drift lower unless there is a dramatic fall in the Greenback.

AUD/USD has immediate resistance today at 0.7180 followed by 0.7210. Immediate support can be found at 0.7110 followed by 0.7080. Look for a likely trading range between 0.7080-0.7180 today, with the preference to sell into rallies.

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