AUD/USD Gains Briefly, Falls Down Sharp

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Here we have Australian CPI for yet another quarter.

AUD CPI q/q: 0.7% v 0.5% expected, and 0.4% previous.

The headlines saw the AUD go up at first, but these gains were short-lived as it went back down through London and New York.

It all happened because of the core inflation number being subdued, going in at 1.3% v the 1.4% expected. This is the figure that the RBA keeps a watch over when making monetary policy decisions and the sober reading is the one that everyone is now talking about and putting pressure on the Aussie.

Check out yesterday’s AUD/USD charts and the way that price is still reacting around the daily trend line resistance level that we were talking about.

AUD/USD hourly

AUD/USD hourly

The CPI beat gave price the instant kick, but concerns around the core inflation level possibly keeping the door for the RBA to cut ajar (something I don’t exactly agree will happen) meant that as soon as we hit London session, price was smacked back down.

On that hourly chart, I’ve highlighted how easy it is to find intra-day levels to manage your risk around. At the time of publishing, that right there is something like a 10 pip stop offering crazy-good risk:reward on the trend line reactivation if you’re ultra aggressive.

There’s certainly plenty of opportunity in these types of levels.

This Thursday

NZD Trade Balance

GBP Prelim GDP q/q

USD Core Durable Goods Orders m/m

USD Unemployment Claims

This is a guest post originally appeared on Vantage FX. Reposted with permission.

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