CPI for 2Q estimate 0.5% vs 0.4% in 1Q

The Australia CPI will be released in the new trading day with the following estimate for Q2

  • Headline CPI QoQ +0.5%, vs 0.4% in Q1
  • YoY is expected to rise to 2.2% (from 1.9%).
  • Trimmed mean QoQ is expected at 0.5% vs 0.5% in Q1
  • Trimmed mean YoY 1.9% vs 1.9% last quarter
  • Weighted Median is also expected to rise 0.5% vs 0.5%
  • Weighted Median YoY is expected to dip to 1.9% vs 2.0%

Stronger or weaker than expected will help kick the pair higher or lower.

What levels are in play technically through the number?

Looking at daily chart, the pair has been waffling higher and lower in July (and going back to the end of June 2018 too).

The low reached 0.73099. The high extended to 0.7484. That is not a big range.

Moreover, you can see the ups and downs. There is a lot of green and red bars.

What we do know from the daily, is the price is consolidating near low levels going back over a year. In July the price moved below the May 2018 low at 0.7328 (and traded at the lowest level since January 2017). The bad news is the breaks to new lows did not go very far (only to 0.73099 at the lows).

We currently trade at 0.7416 - near the middle of the recent range. It is also right around the May 2018 swing low of 0.7412. That May low will be a swing level. Move above is bullish. Move below is bearish.

Of course, ultimately, traders will be looking for a bigger push above the 0.7484 or below the 0.73099 level to help define the next move for the pair. Does it happen today? It could. Either extreme is not that far away and a surprise number could be the next kick traders are looking for.

Drilling to the hourly chart below, the ups and downs are quite noticeable. Nevertheless there are a couple levels that stick out for the buyers and the sellers (ahead of the extremes).

On the upside, traders will be eyeing the trend line at the 0.7433 and then not far from there, the swing levels at 0.7437-43. Get above, should lead to a run toward the high extreme at 0.7483.

On the downside, the 200 and 100 hour MAs comes in at 0.73958 and 0.73886. Move below will have traders looking toward a swing area at the 0.7358 area. A break of those levels and the extreme low from July 2 a 0.73099 will be eyed.

Much depends on the number but given a surprise, it may help to give the AUDUSD a kick outside the range that has confined the range.

IF there is no surprise, look for more ups and downs but pay attention to the levels nevertheless.