AUDUSD retests 4H support after CPI drop
Hi, traders. Today we saw the AUDUSD retreat after the Australian CPI data came in at 7.4, well below the 8.1% that had been expected. The interesting thing about unexpected data is that it almost always has more impact on the market than expected, as it has that shock effect.
The 7.4 Australian Data result is still a very firm number for inflation, and you might think, why is that a good thing? The drop is good, and it shows the RBA’s policy is working, and it also starts to put some doubt on the current rates outlook. But we’re wondering just how good it is. Yes, this could have an impact on the current rates policy, but we still feel that rates will have to continue higher to cut this figure back further.
The AUDUSD continues to fight back after testing .6700. The price at this point remains in its 4H consolidation pattern. Could the market be thinking it’s a good drop, but work still has to be done?
Will we see a retest of .6700 in tonight’s LON session? Buyers have .6752 resistance to beat, and sellers have .6700 to break. These are the 4H levels we are watching on the AUDUSD, and if one of them can be beaten, we will look to see if a new leg can develop.