The Australian dollar has broken higher from the recent consolidation range and the coming week’s data could determine whether this will be a longer term trend resumption move or not. Inflation data, which is due this week, could influence the next rate decision for the Australian Dollar.
Recent RBA meeting minutes are giving mixed signals. The RBA is in “wait and see” mode and their next decision could determine whether the all time highs on AUD/USD are surpassed. This week’s CPI data is seen as key regarding any future interest rate decision and shows changes in the cost of goods and services as purchased by consumers; this data is released quarterly. The US debt talks will also be a major factor and should be monitored accordingly.
From a technical perspective; the previous resistance level, as highlighted on the attached chart, could possibly provide some kind of support now. Intra day price action at this level will be of interest for anyone looking to go long on AUD/USD.
A confirmed entry using “currency correlation relative strength” can sometimes be used to capture a longer term move from the lower time frame charts in scenarios like this.
Please see attached charts.
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