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Chart of the Day: AUDUSD

It’s a busy week on the economic front here in Australia ahead of Wednesday's CPI figures. The markets are seeking more clarity from the US: the FOMC meeting and Non-farm payrolls data are driving the key headlines for AUDUSD.

AUDUSD daily chart
"AUDUSD daily chart"

Over the past few months, we’ve seen very little progress from US-China trade talks and the Brexit saga. But Wednesday’s CPI data could provide us with an idea of where our economy is headed. Inflation is expected to climb to 1.7% from 1.6% per annum for Q2 2019, which is indeed well below the RBA’s forecasted annual growth rate of 2%. A considerable undershoot could provide a broad sell-off in the pair.

The AUDUSD bounced off strongly from the September highs. It feels any upside rallies are to be sold at least until proven otherwise, and we can’t discount the medium- and long-term downtrend in play. The pair rebounded from the bearish double top with a short-term support price target consolidation at 0.6783 mark. Right now, we feel the macro playbook has the better of it, as opposed to technical analysis, and any positive data might re-test the most recent resistance highs at 0.6894 mark.

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