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AUD/USD Trades to New Lows on CPI Data Miss

AUD/USD Trades to New Lows on CPI Data Miss

Walker England, Forex Trading Instructor

Talking Points:

The AUD/USD is breaking out to new weekly and monthly lows today, after this morning’s inflation data was released below expectations. AUD Consumer Price Index (YoY) (1Q) was expected in at 2.2%, but was released at an actual 2.1%. Technically today’s move should be seen as significant, as the AUD/USD is now putting in a new lower low beneath .7473 in a developing downtrend. Traders should note that that the AUD/USD is now trading below both its 10 day EMA (exponential moving average) at .7535 and its 200 day MVA (simple moving average) at .7546. If prices continue to trend lower, these lines will become points of resistance as the pair trades downward.

AUD/USD, Daily Chart & Averages

(Created Using IG Charts)

Intraday analysis now shows the AUD/USD trading through today’s S3 pivot at .7468. If prices remain supported near present levels, the pair may retrace back towards the S2 pivot at .7494. This area was previously considered a value of support, but with this morning’s breakout it may now be referenced as a point of short term resistance. While prices have traded significantly away from today’s central pivot at .7543, a move to this point would open the AUD/USD to trade back towards other values of resistance. This includes today’s R1 and R2 pivots at .7566 and .7593 respectfully.

AUD/USD, 30 Minute Chart and Pivots

(Created Using IG Charts)

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Lastly, sentiment for the AUD/USD has recently flipped positive. Currently IG Client Sentiment totals read at +1.16, compared to last week’s reading of -1.26. With 54% of trader’s net-long the pair, this reading is still considered neutral. If prices continue to trade lower to end this week’s trading, traders should look for this value to push towards positive extremes of +2.0 or more. Alternatively if the AUD/USD rebounds, traders may look for sentiment figures to neutralize and potential flip back to a negative reading.

--- Written by Walker, Analyst for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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