AUD/USD shorts were the best trade this week

The Australian dollar was quietly the worst performer

The New Zealand dollar was hit by political turmoil, the Canadian dollar as thumped by a dovish central bank but it was the Australian dollar that lagged the market this week with a 2% loss.

5-day FX performance:

The AUD decline was in part due to a miss in Q3 CPI. The consensus was for a 2.0% rise in the trimmed mean but it climbed just 1.8% y/y.

The other side of the equation was the strong US dollar. It was boosted by some strong economic data, tax cut progress and talk of John Taylor as the next Fed chairman.

Technically, AUD/USD has fallen for six consecutive days. Shorts got a break on Wednesday when the October low gave way.

Looking ahead, there is still daylight between current levels and support at the July lows. The target of the head-and-shoulders pattern also registers around 0.7400.