AUD/USD Fell Sharply After Low Q1 Inflation Growth | FXTimes …
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AUD/USD Fell Sharply After Lower Q1 Inflation Growth
Fan Yang 9:32 AM EDT April 23rd, 2014
CPI growth in Australia came in at 0.6% for Q1. The previous quarter’s reading was 0.8%, and so was economists’ forecast for Q1. CPI in Q1 from a year earlier grew 2.9%, missing the 3.2% forecast. The lower than expected inflation data might present a challenge for the RBA to raise rates and thus hampered AUD-strength. The 2.9% rate on the year is within the 2%-3% target for the RBA, so this data should not seriously prevent a rate hike, but in the short-term, traders are using it as an excuse to take away some of AUD’s 2014 gains.
The 1H AUD/USD chart shows the sharp bearish reaction that turned around a bullish continuation attempt. It looks to be following through as the 4/23 US session starts.
(audusd 1h chart, 4/23)
Support:
The sharp slide extends a bearish correction in April against the bullish trend that persisted since late January. The 4H chart shows price entering a previous consolidation zone. In the near-term, look for support around and above the 0.9250 support and central pivot of the previous consolidation zone. Below that the market is likely to challenge the previous consolidation support near 0.9210.
(audusd 4h chart, 4/23)
Stochastic:
Also note that the stochastic in the 4H chart is in oversold levels. The stochastic reading on the daily chart is approaching oversold levels too, but there is some short-term downside risk toward a previous consolidation support at 0.9210 and then 0.9135-40 pivot area.
While the current dip suggests downside risk, we should be ready for a bullish cycle in the short-term after the current dip, especially when the stochastic in the daily chart turns up.
(audusd daily chart, 4/23)
Fan Yang, CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.
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AUD/USD Fell Sharply After Low Q1 Inflation Growth | FXTimes …
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