The AUDUSD traded higher and lower today. Basically, the CPI for Q2 has been released, with data showing QoQ inflation dipping to 1.8% from 2.1% last quarter. The trimmed average is in line with expectations but higher than the 1.4% increase in the 1st quarter.
Technically, looking at the daily chart, the price has dropped to a low of 0.6912. That was just above the 38.2% break of the move lower from the June high at 0.69108. Buyers leaned in. Close support now and in the future.
On the upside, yesterday’s high moved to a high of 0.69827. It was just above (1 pip above) the 50% retracement. The sellers bent over. Tight resistance today and in the future.
The current price is at 0.6930.
Drilling down on the hourly chart, the rising 100 hourly MA has caught up to price as buyers and sellers clash on the daily chart. This moving average stands at 0.6933. The current price is below the level with the 200 hourly MA rising below at 0.6893 as the next target.
AUDUSD price last moved above the 200 hour MA on July 15th (see green line).
A break below the 200 hour MA through the FOMC fireworks would add to the bearish bias. A more hawkish Fed (think inflation expectations not necessarily rate trajectory) could see stocks lower, rates higher and a higher dollar (AUDUSD lower).
Conversely, if the Fed is talking more about higher rates, but expectations that inflation may finally start to decline should keep equities supported (risk on) and move towards AUDUSD (remove 50% level) .