AUD/USD – Steady as Australian CPI Remains Unchanged

The Australian dollar has posted slight gains on Wednesday, as AUD/USD is trading at the 0.88 line. On the release front, Australian CPI held steady at 0.5%. Trimmed Mean CPI slipped to 0.4% in September. Later in the day, RBA Governor Glenn Stevens will address an event in Sydney. In the US Core CPI and CPI met expectations, with both indicators posting a small gain of 0.1%.

US numbers have generally been strong, but very low inflation levels continue to point to slack in the economy. On Wednesday, this trend continued with soft consumer inflation numbers. CPI rose to +0.1%, an improvement from the previous reading of -0.2%. The estimate stood at 0.0%, so the markets clearly did not have high expectations. It was a similar story from Core CPI, which also posted a 0.1%, up from 0.0% a month earlier. This was shy of the forecast of 0.2% but still within expectations.

In Australia, CPI remained at 0.5%, unchanged from the previous reading. Trimmed Mean CPI, which excludes the most volatile items in CPI, showed a gain of 0.4%, well of the previous release of 0.8% and a six-month low. The forecast stood at 0.6%. Earlier in the week, the RBA released the minutes of its last policy meeting. Predictably, the RBA took a shot at the high value of the Australian dollar, with the central bank saying that the currency was still weighing on the economy. However, the minutes noted that Australian growth continued to be “moderate”. Meanwhile, the currency got a helping hand from Chinese Industrial Production, which shot up to 8.0%, up from 6.9% a month earlier. The excellent reading easily beat the forecast of 7.5%. Chinese GDP slipped to 7.3% in Q3, down from 7.5% in the previous quarter, but above the estimate of 7.2%. The Aussie is sensitive to key Chinese numbers, as China is Australia’s number one export destination.

AUD/USD for Wednesday, October 22, 2014

AUD/USD October 22 at 14:00 GMT

AUD/USD 0.8789 H: 0.8803 L: 0.8748

AUD/USD Technical

• AUD/USD edged higher in the Asian session. The pair has been choppy in the European and North American sessions.
• 0.8820 remains active and has switched back to a resistance role. 0.8953 is stronger.
• 0.8763 is an immediate support line. 0.8668 is next.
• Current range: 0.8763 to 0.8820

Further levels in both directions:

• Below: 0.8763, 0.8668, 0.8550 and 0.8456
• Above: 0.8220, 0.8953, 0.9020, 0.9119 and 0.9217

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Wednesday. This is not consistent with the pair’s movement, as the Aussie has posted slight gains. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD continuing to move to higher ground.

AUD/USD Fundamentals

• 12:30 Australian CPI. Estimate 0.5%. Actual 0.4%.
• 12:30 Australian Trimmed Mean CPI. Estimate 0.5%. Actual 0.4%.
• 12:30 US CPI. Estimate 0.0%.
• 12:30 US Core CPI. Estimate 0.2%.
• 14:30 US Crude Oil Inventories. Estimate 2.8M.
• 21:00 RBA Governor Glenn Stevens Speaks.

* Key releases are highlighted in bold

*All release times are GMT

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