Australian consumer confidence weakened, but the Westpac Leading Index increased. Inflationary pressures as measured by the CPI remained tame in the fourth quarter and below the RBA’s annualized target of 2.0% annualized. The AUDUSD lost selling pressure after it moved into its horizontal support area, but how will price action be impacted by US economic data today? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Forex traders eagerly anticipate the press conference following this evening’s FOMC interest rate decision. Expectations call for no change, but the outlook may be altered as economic data has been weak. While no immediate change is likely, the wording of the statement could provide further clues. Will bulls get the necessary wording to spark a rally in the AUDUSD, or can bears extend the sell-off? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian ANZ Roy Morgan Weekly Consumer Confidence Index: The Australian ANZ Roy Morgan Weekly Consumer Confidence Index for the week of January 26th was reported at 108.0. Forex traders can compare this to the Australian ANZ Roy Morgan Weekly Consumer Confidence Index for the week of January 19th, which was reported at 108.3.
- Australian Westpac Leading Index: The Australian Westpac Leading Index for December increased by 0.05% monthly. Forex traders can compare this to the Australian Westpac Leading Index for November, which decreased by 0.02%.
- Australian CPI: The Australian CPI for the fourth quarter increased by 0.7% quarterly and by 1.8% annualized. Economists predicted an increase of 0.6% quarterly and of 1.7% annualized. Forex traders can compare this to the Australian CPI for the third quarter, which increased by 0.5% quarterly and by 1.7% annualized. The RBA Trimmed Mean CPI for the fourth quarter increased by 0.4% quarterly and by 1.6% annualized. Economists predicted an increase of 0.4% quarterly and of 1.5% annualized. Forex traders can compare this to the RBA Trimmed Mean CPI for the third quarter, which increased by 0.4% quarterly and by 1.6% annualized. The RBA Weighted Median CPI for the fourth quarter increased by 0.4% quarterly and by 1.3% annualized. Economists predicted an increase of 0.4% quarterly and of 1.2% annualized. Forex traders can compare this to the RBA Weighted Median CPI for the third quarter, which increased by 0.3% quarterly and by 1.2% annualized.
Here are the key factors to keep in mind today for US Dollar trades:
- US Advanced Goods Trade Balance: The US Advanced Goods Trade Balance for December is predicted at -$65.5B. Forex traders can compare this to the US Advanced Goods Trade Balance for November, which was reported at -$63.2B.
- US Pending Home Sales: US Pending Home Sales for December are predicted to increase by 0.5% monthly and 3.2% annualized. Forex traders can compare this to US Pending Home Sales for November, which increased by 1.2% monthly and by 5.6% annualized.
- US FOMC Interest Rate Decision: The US FOMC Interest Rate Decision is predicted to show Upper Bound Interest Rates at 1.75% and Lower Bound Interest Rates at 1.50%. Forex traders can compare this to the previous US FOMC Interest Rate Decision, which showed Upper Bound Interest Rates at 1.75% and Lower Bound Interest Rates at 1.50%. The Interest Rate on Excess Reserves is predicted at 1.55%. Forex Traders can compare this to the previous Interest Rate on Excess Reserves, which was reported at 1.55%.
Should price action for the AUDUSD remain inside the or breakout above the 0.6710 to 0.6780 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.6770
- Take Profit Zone: 0.6955 – 0.7030
- Stop Loss Level: 0.6670
Should price action for the AUDUSD breakdown below 0.6710 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.6670
- Take Profit Zone: 0.6555 – 0.6610
- Stop Loss Level: 0.6710
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