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The Australian dollar isn’t falling down that fast, and now it has a good reason to rise. Quarterly inflation figures for the second quarter show that the Trimmed Mean CPI (aka core CPI in other countries) is quite strong: 0.8% q/q against 0.6% expected, and 2.9% year over year, more than 2.7%. There were no surprises with headlines inflation: 0.5% q/q and 3% y/y as expected.

On one hand, the RBA wants a weaker Australian dollar and has managed to talk down the currency after the pair peaked at 0.95. On the other hand, the same central bank focuses on core inflation, and this indicates that inflation is quite present. AUD/USD reacted positively so far.

AUD/USD reacted strongly with a clear move upwards: from 0.9385 to 0.9435.  At the time of writing, the pair is resting above support at 0.9325. Here is how it looks at the chart:

AUDUSD jumps July 23 2014 technical 30 minute chart trimmed mean CPI

Further support awaits at the round number of 0.94. The next level of resistance is 0.9460, but more serious resistance is at the very round number of 0.95. Another important event impacting the Aussie awaits us:

See how to trade the Chinese Manufacturing PMI with AUD/USD