AUD/USD firms as traders brace for Australia Q3 inflation data and Fed decision

The Australian Dollar (AUD) edges greater versus the United States Dollar (USD) on Tuesday, extending its winning streak for the 5th successive session as the Greenback remains under pressure ahead of the Federal Reserve’s (Fed) rates of interest choice on Wednesday. At the time of composing, AUD/USD trades around 0.6586, up almost 0.5% on the day and marking its greatest level in over 2 weeks.

Traders are turning their attention to essential Australian inflation information due early Wednesday, which might form expectations for the Reserve Bank of Australia’s (RBA) financial policy course. The 3rd quarter Customer Cost Index (CPI) is anticipated to reveal a significant pickup, with quarterly inflation seen increasing 1.1% after 0.7% in Q2, while yearly CPI is anticipated at 3.0%, up from 2.1% in the previous quarter.

The RBA’s cut mean CPI is forecasted to climb up 0.8% QoQ and hold stable at 2.7% YoY, while the month-to-month CPI for September is anticipated to come in at 3.1%, up from 3.0% in August.

A stronger-than-expected inflation print would enhance expectations that the RBA will keep a careful position at its November 4 financial policy conference, possibly boosting the Aussie. On the other hand, throughout the Pacific, the Fed is extensively anticipated to provide another 25-basis-point rate cut on Wednesday, a relocation currently priced into markets.

From a technical point of view, AUD/USD has actually broken above a short-term debt consolidation variety in between 0.6520 and 0.6480, signifying restored bullish momentum. The set now trades easily above the 21-, 50-, and 100-day Simple Moving Averages (SMAs) clustered in between 0.6540 and 0.6555, which have actually developed into near-term assistance.

Momentum signs likewise indicate enhancing belief. The Relative Strength Index (RSI) is pointing north and has actually climbed up above the 50 mark, while the Moving Typical Merging Divergence (MACD) indication reveals a bullish crossover with the signal line, accompanied by increasing green pie chart bars, an indication of reinforcing bullish momentum.

A continual relocation above 0.6600 might open the course towards the October swing high near 0.6629, and a definitive break above this level might lead the way for a retest of the year-to-date high around 0.6707 and beyond. On the drawback, preliminary assistance lies at 0.6550, followed by 0.6520.