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Last week, we mentioned that behind the Aussie’s range-bound behavior, one could spot lower highs. Well, the pair quietly slipped out of the range. At 0.7616, the A$ is trading at its lowest levels against the greenback since July.

There hasn’t been any apparent catalyst and the move is not huge. Oil prices are off the highs, and as a commodity currency, the Aussie is influenced by this. Other commodity currencies such as the Canadian and New Zealand dollars are sliding as well.

Yet this correlation and the lack of any immediate driver of the Aussie mask the fundamental issue. The Australian economy is growing, but inflation is nowhere to be seen. The latest inflation report was quite disappointing and AUD/USD certainly reacted to that. What we are seeing now is an extension of that drop.

And while the RBA currently sits on its hands, the next move seems to be down rather than up on interest rates. It would probably take another soft CPI report to move the RBA, but it’s hard to see how prices can rise.

The authorities publish inflation data only once per quarter and the currency doesn’t wait. In any case, the big event for this week is the jobs report, due early on Thursday.

More:  Elliott Wave Analysis: AUDUSD and NZDUSD