This will be a quiet few days for economic data out of Australia following on from last week’s GDP numbers and the Reserve Bank of Australia monetary policy statement, neither of which were market moving.
Attention will now focus on commodity prices and hints President Trump will exempt Australia from his tariff hikes (which gave the AUD a boost on Friday).
In the US the main event will be the Consumer Price Index update on Tuesday.
More slow but sure progress on core inflation is expected. This will be the last major data point ahead of the Federal Open Market Committee meeting next Monday-Tuesday when we will learn how many bullets the Fed has loaded into its pistol for 2018.
Markets are pricing in just short of three 25 basis point hikes by year end.
Management and risk description
The AUD's price action over the past 2-3 weeks has formed an Inverse Head and Shoulders bottoming formation.
Neckline support lies around the 0.7820 level; with an upside pattern objective of 0.7980 over the coming days (refer Hourly Chart below).
In the short term, support lies at 0.7835/0.7820 for rally onto 0.7890/0.7905 resistance, en route to 0.7980/0.8010 ahead.
Entry: Today: Aussie dollar seen as a buy (market) and again at 0.7830 if seen
Stop: just under 0.7815, initially.
Target: 50% at 0.7898 and 50% at 0.7986
Time horizon: several days at least
AUDUSD hourly chart (click to expand)
AUDUSD daily chart (click to expand)
AUDUSD weekly chart (click to expand)
Source: All charts, ThomsonReuters
— Edited by Adam Courtenay
Non-independent investment research disclaimer applies. Read more
A compiled overview of Trade Views provided on TradingFloor.com is found here