Inflation data out of Australia for the third-quarter eased further, but the AUDUSD kept its bullish momentum is now trading at a strong resistance level. Today’s US interest rate decision is expected to have a big impact on the US Dollar and forex traders are anticipated to wait for the press conference following the expected interest rate cut before committing to new US Dollar positions. How will price action react after the press conference? Today’s fundamental analysis will take a look at price action in both directions.
Forex traders will pay close attention to today’s FOMC press conference as expectations for an interest rate cut are already priced in. Will the Fed signal that today’s cut will be the last or are more to come? Prior to the announcement, key ADP and GDP data will be released and economists predict a further slowdown across the board. How will this impact the AUDUSD? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here is the key factor to keep in mind today for Australian Dollar trades:
- Australian CPI: The Australian CPI for the third-quarter increased by 0.5% quarterly and by 1.7% annualized. Economists predicted an increase of 0.5% quarterly and of 1.7% annualized. Forex traders can compare this to the Australian CPI for the second-quarter which increased by 0.6% quarterly and by 1.6% annualized. The RBA Trimmed Mean CPI for the third-quarter increased by 0.4% quarterly and by 1.6% annualized. Economists predicted an increase of 0.4% quarterly and of 1.6% annualized. Forex traders can compare this to the RBA Trimmed Mean CPI for the second-quarter which increased by 0.4% quarterly and by 1.6% annualized. The RBA Weighted Median CPI for the third-quarter increased by 0.3% quarterly and by 1.2% annualized. Economists predicted an increase of 0.4% quarterly and of 1.3% annualized. Forex traders can compare this to the RBA Weighted Median CPI for the second-quarter which increased by 0.4% quarterly and by 1.2% annualized.
Here are the key factors to keep in mind today for US Dollar trades:
- US ADP Employment Change: The US ADP Employment Change for October is predicted at 115K. Forex traders can compare this to the US ADP Employment Change for September which was reported at 135K.
- US GDP: The Advanced US GDP for the third-quarter is predicted to increase by 1.6% annualized. Forex traders can compare this to the previous third-quarter GDP which increased by 2.0% annualized. Personal Consumption for the third-quarter is predicted to increase by 2.6% annualized. Forex traders can compare this to previous third-quarter Personal Consumption which increased by 4.6% annualized. The GDP Price Index for the third-quarter is predicted to increase by 1.9% annualized. Forex traders can compare this to the previous third-quarter GDP Price Index which increased by 2.4% annualized. The Core PCE for the third-quarter is predicted to increase by 2.2% annualized. Forex traders can compare this to the previous third-quarter Core PCE which increased by 1.9% 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 2.00% and Lower Bound Interest Rates at 1.75% 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 1.85%.
Should price action for the AUDUSD remain inside the or breakout above the 0.6845 to 0.6880 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.6860
- Take Profit Zone: 0.7025 – 0.7080
- Stop Loss Level: 0.6810
Should price action for the AUDUSD breakdown below 0.6845 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.6810
- Take Profit Zone: 0.6670 – 0.6725
- Stop Loss Level: 0.6845
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