Audusd drops amid lack of major economic news, focus turns to upcoming Australian CPI release

AUDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	-0.36%	-23.1 Pips
Week to-date	-0.43%	-27.4 Pips
February	2.08%	129.4 Pips

Upcoming key events (London Time)

Wed 12:30 AM AUD Monthly CPI Indicator (12-mth)

What happened lately

In the absence of major economic news on Monday, the Australian Dollar (AUD) experienced a depreciation against the US Dollar (USD), with the AUDUSD pair dropping by 0.36% to trade at 0.63480. This movement indicates a weaker Australian Dollar relative to its US counterpart, which may have been influenced by prevailing market conditions and investor sentiments favoring the USD amidst global economic uncertainties or the anticipation of forthcoming financial data.

Looking ahead, market participants are gearing up for the upcoming release of the Australian Monthly CPI Indicator, which is scheduled to be announced on Wednesday at 12:30 AM. This high-impact data point will offer insights into inflationary trends within the Australian economy over the past twelve months. Inflation figures are closely monitored by traders and investors as they inform future monetary policy decisions by the Reserve Bank of Australia (RBA). A higher-than-expected CPI data could signify rising inflationary pressure, potentially leading to an interest rate hike to control inflation. Conversely, a lower-than-expected reading might suggest subdued inflation, possibly keeping interest rates steady or considering cuts to stimulate economic activity.

The anticipated volatility surrounding the release of the Australian CPI data could have a pronounced effect on the AUDUSD exchange rate. If the CPI figures indicate robust inflationary pressures, traders might speculate on a hawkish stance from the RBA, thereby strengthening the AUD against the USD. Conversely, if the data suggests weak inflation, it could result in a bearish outlook for the AUD, leading to further depreciation against the USD. As a result, market participants are advised to exercise caution and closely monitor the CPI release for potential impacts on the AUDUSD trading pair. Moreover, any external influences such as geopolitical developments or broader economic indicators affecting the USD should also be taken into account as contributing factors to the currency pair’s movement.

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What can we expect from AUDUSD today?

AUDUSD on Monday dropped -0.36% to 0.63480. Price is below 9-Day EMA while Stochastic is falling.

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

Looking ahead for the day, immediate support level is at S1 0.63303 with break below could see further selling pressure towards S2 at 0.63127. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.63922 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.63436 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: