The Australian dollar remains pressured in the lower part of a the long term 1.0150 – 1.06 range. In the past few days, it has descended in a downtrend channel.
Inflation in Australia came out below expectations, raising the prospects of a rate cut, or at least pushing any potential rate hike back.
At the time of writing, AUD/USD is trading at 1.0242, above the lows of 1.0220 which serves as support but significantly below a.03 which provides some resistance. 1.04 capped an attempt to rise. On the downside, 1.0150 is a key line, despite a temporary breach earlier in the year. 1.01 serves as the last defense before parity.
A downtrend channel can be seen on the hourly chart. The pair is in the middle. Here is a chart of the channel:
For more on the Aussie, see the AUD/USD forecast. Here is a live chart of the trade idea:
AUD/USD Downtrend Channel on Hourly Chart by forexcrunch on TradingView.com
After a rise of 0.2% in prices during Q4 2012, a rise of 0.7% was expected in the headline Consumer Price Index. However, the actual result was a rise of only 0.4%. The Trimmed Mean CPI (also known as Core CPI in other countries) rose by only 0.3%, lower than +0.5% that was expected and 0.6% in the previous quarter.
Australian PM Julia Gillard recently said that Australia will have to live with a strong A$. This is making exports less competitive, but holding inflation on lower ground. On this background, the RBA could become more dovish.
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