EUR/USD, AUD/USD and USD/JPY await US inflation data
Outlook on EUR/USD, AUD/USD and USD/JPY ahead of Tuesday’s US October CPI data.
EUR/USD awaits US CPI print
EUR/USD still range trades below last week’s near two-month high at $1.0756 but does so above the 55-day simple moving average (SMA) at $1.0638 ahead of Tuesday’s US consumer price inflation (CPI) data release. Analysts expect core inflation in October to remain at 4.1% but the year-on-year (YoY) headline inflation to slip from 3.7% to 3.3%.
As long as the 55-day SMA underpins, the medium-term bullish trend remains bullish. Were it to be fallen through on a daily chart closing basis, however, the late September high at $1.0618 could be revisited.
For the current gradual rise to continue a daily chart close above Thursday’s high at $1.0725 needs to be seen. Were it at Monday’s high at $1.0756 to be exceeded, the 200-day SMA at $1.0803 would be targeted, together with the $1.0834 July low.
AUD/USD tries to short-term level out
AUD/USD’s sell-off from its near three-month high at $0.6523 following the Reserve Bank of Australia’s (RBA) rate hike by 25 basis-points (bp) to 4.35%, which was seen by analysts as the last one in this cycle, took the cross to last week’s low at $0.6339. Above it, the currency pair is trying to stabilize.
The 55-day SMA at $0.6392 may act as immediate resistance, together with the late October high at $0.6399. If overcome, the 11 October high at $0.6445 could be reached as well.
Below last week’s low at $0.6339 lies major support between the early and late October lows at $0.6286 to $0.6271.
USD/JPY trades close to the October 2022 peak
USD/JPY has risen on six consecutive days and got within a whisker of its October 2022 peak at ¥151.95 as Japan inflation nears a three-year low. Monday’s data showed that producer prices in Japan rose by 0.8% YoY in October which was the lowest inflation since a deflation in February 2021 and marked the tenth straight month of a slowdown.
Since the cross flirts with the October 2022 peak, the risk of Bank of Japan (BoJ) currency intervention remains high.
The one-week uptrend line at ¥151.63 currently underpins USD/JPY. Below it minor support can be found at the 26 October high at ¥150.78. Further down lies the psychological ¥150.00 mark.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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