AUD/USD Levels to Know for Australia CPI Tonight

2017-04-25 15:00:00 Michael Boutros

Talking Points

AUD/USD at risk sub-7611 heading into Australia CPI
Updated targets & invalidation levels
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AUDUSD 240min

Technical Outlook: AUDUSD has been trading within the confines of a well-defined descending pitchfork formation with a sliding parallel extending off the 3/30 high continuing to cap the weekly opening range highs. Heading into tonight’s Australia Consumer Price Index (CPI), the pair remains vulnerable while below the upper parallel / 50% retracement at 7611 with near-term support eyed at the 75-handle. A break below this level keeps the short-bias in focus targeting 7473 & 7455. Subsequent targets eyed at 7417 & 7385.

A breach / close above 7611 would be needed to shift the focus back to the long-side with such a scenario targeting the monthly open / 61.8% retracement at 7632/43 backed by 7680. Keep in mind consensus estimates are calling for a pickup in both headline & core inflation, leaving the risk weighted to the downside if the data misses.

Check out our 2Q AUD/USD projections and more in our Free DailyFX Trading Forecasts.

A summary of IG Client Sentiment shows traders are net-short AUDUSD- the ratio stands at -1.06 (48.4% of traders are long)- weak bullish reading
Long positions are 10.5% higher than yesterday but 2.6% lower from last week
Short positions are 5.4% higher than yesterday but 9.5% lower from last week
Despite the fact that traders remain net-short, the recent shift in positioning (build in longs) suggests that the long-signal remains vulnerable here heading into tonight’s CPI release. From a trading standpoint, I would be looking to short a spike into structural resistance.

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