- Australian Q3 CPI is seen recovering after record lows in Q2.
- Investors cautious as the RBA paved the way for a fresh rate cut.
- AUD/USD is technically neutral above the critical 0.7000 threshold.
Australia will release Q3 inflation figures early Wednesday. The quarterly CPI is expected at 1.5%, quite a recovery from the previous -1.9%. When compared to a year early, it is expected to recover from -0.3% to 0.7%. The Trimmed Mean CPI from the Reserve Bank of Australia is expected at 0.3% QoQ from -0.1%, and at 1.1% YoY from 1.2% in Q2. A significant improvement that falls short of RBA’s 2-3% target band.
The Minutes of the latest central bank’s meeting showed that policymakers are inclined to follow current inflation that their own forecasts, which means that there’s a good chance that the market will rush to price in RBA’s possible reaction to inflation figures. Should the numbers miss the market’s expectations, a cash rate cut to 0.1% could be taken for granted for the upcoming meeting, on November 4, with AUD/USD probably falling towards the 0.7000 figure.
However, the market is expecting better-than-previous numbers, based on easing restriction in Victoria’s area. Despite the RBA paved the way for a rate cut, policymakers’ perspectives are generally positive. They keep reaffirming that the economic slowdown was not as bad as initially estimated. In this scenario, upbeat figures could provide support to the Australian dollar. Still, the aussie has a limited bullish potential, amid caution ahead of the next RBA meeting.
AUD/USD Technical outlook
From a technical point of view, the AUD/USD pair is neutral in the mid-term, holding above the 0.7100 figure. The daily chart shows that the pair has spent the week confined to a tight range defined by horizontal 20 and 100 DMAs. Technical indicators, in the meantime, head nowhere around their midlines.
The same chart shows that the pair bottomed at 0.7005 in September and at 0.7020 this October. An intermediate support level is 0.7070, with a break below this last exposing the 0.7000 area. To the upside, 0.7160 is the first resistance level, ahead of the 0.7210/40 price zone.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD holds lower ground near 0.6350 after downbeat Aussie jobs data
AUD/USD is holding lower ground near 0.6350 in Asian trading on Thursday. The downbeat Australian jobs data fans RBA rate cut bets, maintaining the downward pressure on the pair. US-China trade tensions and US Dollar recovery act as a headwind for the pair.
USD/JPY fades the rebound to 142.85 amid US-Japan trade optimism
USD/JPY fades the impressive rebound from seven-month lows of 141.61, falling back toward 142.00 in the Asian session on Thursday. The pair tracks the US Dollar price action, fuelled by contrstructive trade talks between the US and Japan. A tepid risk recovery supports the pair.
Gold price corrects from record highs of $3,358
Gold price retreats from a fresh all-time peak of $3,358 reached earlier in the Asian session on Thursday. Despite the pullback, tariff uncertainty, the escalating US-China trade war, global recession fears, and expectations of more aggressive Fed easing will likely cishion the Gold price downside.
Ethereum face value-accrual risks due to data availability roadmap
Ethereum declined 1%, trading just below $1,600 in the early Asian session on Thursday, as Binance Research's latest report suggests that the data availability roadmap has been hampering its value accrual.
Future-proofing portfolios: A playbook for tariff and recession risks
It does seem like we will be talking tariffs for a while. And if tariffs stay — in some shape or form — even after negotiations, we’ll likely be talking about recession too. Higher input costs, persistent inflation, and tighter monetary policy are already weighing on global growth.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.